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The Federal Trade Commission’s “energy czar” Wednesday told lawmakers that the regulatory agency is ready to flex its muscle, for instance by blocking harmful oil industry mergers, to keep gasoline prices as low as possible for consumers. The FTC, responsible for merger reviews of refiners, pipeline companies, retailers and other players in the petroleum business, dispatched John H. Seesel, associate general counsel for energy, to the Energy Committee of the House of Representatives to testify during a hearing on energy prices. “The Federal Trade Commission has an aggressive program to enforce the antitrust laws in the petroleum industry,” Seesel told the committee. “The Commission has taken action whenever a merger or nonmerger conduct has violated the law and threatened the welfare of consumers or competition in the industry. The commission continues to study this industry in detail, to monitor wholesale and retail gasoline prices and to search for instances of illegal mergers or anticompetitive conduct.” Seesel cited recent example of merger investigations where the FTC required concessions from parties in the interest of consumers. Chevron Corp.’s attempt to purchase Unocal Corp. was hampered by an antitrust case in litigation before the FTC. The agency had claimed Unocal executives manipulated a standard-setting organization in California to establish its patented method for reformulated gasoline as the state standard, then charged royalties from all refiners in the state. When Chevron proposed the merger to regulators, the company offered to give the patents to the public domain, rather than pursuing about a nickel a gallon as Unocal had been doing. Other mergers have resulted in a variety of divestitures, though only four mergers since 1981 have been dropped because of federal attempts to require divestitures, he said. Further details of the FTC efforts to cabin the cost of gasoline through the merger review process are also detailed in a report the FTC issued last year on the closely monitored industry, Seesel said. Seesel also told lawmakers that the crux of the problem is the increasing cost of crude. “When crude oil prices rise, so do gasoline prices. Crude oil prices are determined by supply and demand conditions worldwide,” he testified. Copyright �2005 TDD, LLC. All rights reserved.

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