Newspaper article THE JOURNAL RECORD

Oil Execs Deny Plot to Keep Gasoline Prices High

Newspaper article THE JOURNAL RECORD

Oil Execs Deny Plot to Keep Gasoline Prices High

Article excerpt

WASHINGTON (AP) -- Oil executives disavowed internal memos obtained by congressional investigators that suggest a campaign to manipulate gasoline supplies to boost prices, especially in California and the Midwest.

The internal documents were cited at a hearing by the Senate Governmental Affairs investigations subcommittee Tuesday as evidence that oil companies plotted to reduce supplies to assure high prices in tight gasoline markets.

"Price spikes are becoming a way of life," Sen. Carl Levin, D- Mich., the panel's chairman, told the oil executives. He said there is strong evidence that companies worked to keep markets tight by curtailing supplies when necessary.

Levin repeatedly questioned a vice president of BP about a 1999 BP Amoco document that discussed numerous ways supplies could be cut to influence prices, including proposals to export gasoline to Canada or ship products other than gasoline to take up space on crowded pipelines. The document also said other companies might be influenced to cut production, or environmental rules could be used to curtail shipments.

Ross Pillari, a BP vice president for marketing, acknowledged the 1999 memo was discussed in a brainstorming session by senior executives, but he said the proposals "were viewed as inappropriate" and summarily rejected.

"It was naive to think these kinds of activities would influence the marketplace," said Pillari, who was not at the meeting. He said the employees who drafted the memo were later "counseled" by BP Amoco management.

Levin called the document "outrageous" and said it supports the conclusion of a subcommittee staff report into gasoline pricing that suggested that oil companies are often intent on propping up retail prices by cutting back on production.

Gary Heminger, president of Marathon Ashland Petroleum, one of the country's biggest refiners, distanced himself from a 1998 internal Marathon document that appeared to welcome oil production cuts by OPEC and refinery interruptions caused by a Gulf Coast hurricane. …

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