D.C. - Mergers of major oil companies will lead to higher prices for consumers and decreased competition in the marketplace, according to an analysis released today by Public Citizen's Critical Mass Energy Project. The proposed mergers require the approval of the U.S. Federal Trade Commission. If approved, the merger Exxon and Mobil will create a mega-company with the largest market share in the nation, which would be a serious threat to competition. The proposed new company would be the leading retailer of gasoline, thus giving it unprecedented market dominance.
Fewer competitors results in higher prices.
That means bigger profits for CEOs and stockholders at the expense of consumers. The BP Amoco-ARCO merger, if approved, would hurt consumers on the West Coast where Arco is a price leader. Members of Congress appear more than happy to give these companies something in return for oil company money. Oil giants claim that their survival is dependent on merging with other companies. An examination of profits from last year, however, shows that even with record low prices, profits were healthy.