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The Honolulu Advertiser
Posted on: Wednesday, March 15, 2006

Oil executives deny gouging on gas

By H. Josef Hebert
Associated Press

WASHINGTON — Top executives from the country's largest oil companies rejected arguments yesterday that size has allowed them overwhelming market power to force up gasoline and other fuel prices.

The executives, appearing before the Senate Judiciary Committee, each said that the industry mergers — a dozen over the last decade — have allow U.S. companies to improve efficiency and achieve the size and scale of operation to compete with the world's government-owned energy companies in the search for oil.

"Every time there is a merger, the prices have gone up. Is that just coincidence?" asked Vermont Sen. Patrick Leahy, the committee's ranking Democrat.

Rex Tillerson, chairman of Exxon Mobil Corp., the world's largest publicly traded oil company, had anticipated the question in his opening remarks.

"With respect to ... whether mergers and acquisitions in our industry have contributed to higher prices at the pump, my answer is no," said Tillerson, whose company earned $36 billion last year.

John Hofmeister, president of Shell Oil Co., said that despite the size of the major oil giants, "this remains a highly competitive industry."

In 2004, the five largest refiners controlled 56 percent of the gasoline refined in the United States, and the 10 top companies controlled 85 percent, according to a study by Public Citizen, a private advocacy group.