To Bring Gas Prices Down, Schumer Demands FTC Block Newly Announced ChevronTexaco-Unocal Merger; Releases Survey Of Cheapest Gas In 5 Boroughs
Merging two of the ten biggest oil companies will drive gas prices even higher; only four oil companies remain, all in cahoots with OPEC
Schumer calls for FTC review of Exxon-Mobil, Chevron-Texaco, Amoco-BP mergers and others to create competition and examine how to bring prices down
With gas prices in New York City breaking every record in the book, as consumers pay 40 cents more now than they were paying last year at this time, and with summer just around the corner threatening to push gas prices even higher, today U.S Senator Charles E. Schumer called on the FTC to block the ChevronTexacoUnocal merger and to review the ExxonMobil merger and the ChevronTexaco mergers to see whether they can be undone. Schumer also released a survey of where to find the cheapest gas in each of the boroughs of New York City.
The bottom line is, the price of gas is going way up and competition is going way down, Schumer said. Without regulating the mergers of these behemoth oil companies, gas prices will continue to go full speed ahead and nothing can rein them in.
On Friday, the price of crude oil on the New York Mercantile Exchange closed at $50.49, and crude oil has been trading at above $50 per barrel for half of 2005. In addition, the average price at the pump in New York State has hit $2.33 already 46 cents higher than it was last year on this date. National average retail gasoline prices have increased to 2.25 and analysts predict that prices could increase as the summer driving season rapidly approaches. In New York City, prices average out at 2.34 which is a full 40 cents above what people in the five boroughs were paying last year.
Gas prices in New York hit a record this Tuesday when they reached $2.34 per gallon and they have stayed there. This is a 9% increase over prices from a month ago and a 21% increase over prices of last year. If gas prices continues to rise at the rate they did this month, in a month, on May 17th a gallon of gas could cost $2.55, by June 17th , a gallon will cost $2.78, and by July 4th gas will cost $ 2.93.Just three months from now gas could break 3.00 a gallon.
If current prices stayed the same for a year, the average New York driver would pay $234 more a year in gasoline over the next year and the average two car family would pay a whopping $468 more in 2005. In total, New York drivers will pay $390,767,832 more per year.
In an effort to create competition to drive these already too high gas prices down, Schumer today called on the FTC to block the newly announced merger between ChevronTexaco and Unocal. The ChevronTexacoUnocal merger, like the ChevronTexaco and ExxonMobil mergers before it, will further reduce competition in the oil industry by placing the vast majority of production and distribution resources under the control of a handful of corporate giants. Schumer also called on the FTC to look at other oil company mergers including ExxonMobil, BPAmoco and ChevronTexaco to examine how to bring gas prices down.
Today the Senator released the results of a new survey of 50 service stations in New York City today that names the lowestprice gasoline in each of the five boroughs. Overall, both the lowest and highest gas prices can be found in Manhattan. The lowest gas price found in New York City as of April 15 was $1.82 at the 145th Street Service Station, 232 West 145th Street. The highest gas price was $2.51 at the Mobil Station on 10th Avenue between 14th and 15th streets. The full survey is attached.
If ChevronTexaco, which is already the worlds fifth largest oil company, is allowed to acquire Unocal, the ninth largest oil and gas company in the world, the resulting corporate entity would be the world's fourthlargest publicly traded oil and gas company behind Exxon Mobil, BP and Shell. Following the merger ChevronTexaco would control 13 billion barrels of oil equivalent proven reserves, and would increase its oil equivalent production to 3 million barrels per day. This amount exceeds the daily production of every OPEC member with the exception of Iran and Saudi Arabia
The merger of these two companies will only intensify the dangerous level of concentration in the oil industry. Consolidation has already seriously undermined competition, leaving American consumers vulnerable to repeated and sustained spikes in the price of oil. Because if the industrys vertical integration the five largest oil companies in the United States control almost as much crude oil production as the Middle Eastern members of OPEC, over half of domestic refiner capacity, and over 60 percent of the retail gasoline market.
Last year, with crude oil averaging $41 per barrel and working families paying exorbitant prices to heat their homes and fuel their cars, the worlds top ten oil companies made more than $100 billion in profit and in some cases posted recordbreaking fourth quarter earnings that were in some cases more than 200 percent higher than the previous year. This year, crude oil prices are consistently trading at above $50 per barrel, simultaneously increasing the financial burden of energy costs for working families and oil company profits.
New Yorkers are getting burned by gas prices and there is no relief in sight. As we head into the summer gas prices will continue to heat up if the Feds dont do something now, Schumer said. A shrinking number of huge oil companies not competing with each other translates to lighter pocketbooks all around. We wouldnt let this happen in another industry and it shouldnt happen here.