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FTC Drops Probe of Shell Refinery Plans

Los Angeles Times: FTC Drops Probe of Shell Refinery Plans

27 May 2005

By Erica Williams, Times Staff Writer

Shell Oil Co. wasn’t attempting to squeeze fuel supplies and boost pump prices in California when it announced plans in 2003 to close its Bakersfield refinery, federal antitrust authorities said Wednesday.

The Federal Trade Commission said it found “strong evidentiary corroboration” of the oil giant’s stated reasons for closing the 70,000-barrel-a-day refinery and would drop its yearlong investigation.

The Houston-based unit of Royal Dutch/Shell Group cited oil supply problems and economic factors for the planned closure. But after public officials intervened, the refinery was sold in March to Flying J Inc., a Utah truck stop operator.

“We’re pleased that the FTC has reached this conclusion and we’re happy with the successful sale of the refinery to Flying J,” Shell spokesman Stan Mays said.

Politicians and consumer activists had accused Shell of plotting to boost profit at its two other California refineries. Shell denied those allegations. The Bakersfield plant produces 2% of California’s gasoline and 6% of its diesel.

Tom Dresslar, a spokesman for state Atty. Gen. Bill Lockyer, said a separate state investigation would close soon. The refinery’s sale, he said, “basically addressed our concerns that we were going to lose that much-needed fuel.”

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