FTC examines claims of gas pricing disparities in Oregon

John Hughes

Tuesday, Feb. 1, 2000 | 4:17 a.m.

WASHINGTON - The Federal Trade Commission is investigating claims that oil companies arbitrarily charge Oregon dealers different prices for the same gasoline, officials said Tuesday.

The FTC also confirmed that agency officials are continuing their investigation of gas prices in Arizona, California, Nevada and Washington state, in cooperation with their attorneys general.

The FTC statement is "a real warning bell to the big oil companies that the federal government isn't going to look the other way any more" on gas pricing, said Sen. Ron Wyden, D-Ore.

Wyden made the claims about arbitrary pricing in a report he submitted to the FTC last June.

Richard G. Parker, the FTC's bureau of competition director, told Wyden in a letter the report is "sufficiently credible" to warrant further investigation.

"We are following up on the information you have given us that these prices do not appear to be based on different costs of delivering to particular geographic areas," Parker told the senator.

Wyden's report said oil companies charge higher prices for branded gasoline as opposed to unbranded gasoline; that oil companies arbitrarily set differing gas prices in different regions of the state; and that oil company owned-and-operated stations sell gasoline at retail prices lower than what competing stations paid wholesale for the gasoline.

The report was based, in part, on confidential statements from gasoline dealers and other "interested parties" who Wyden did not reveal publicly. But Wyden forwarded the names of his sources to the FTC along with the report and invited the agency to interview them.

Linda Dozier, a spokeswoman for Atlantic Richfield Co., or Arco, said Oregon's high gas prices are a result of several factors - not arbitrary pricing.

She said those factors include the 16th-highest state gas tax, a state requirement that all Oregon stations be full service, the state's high minimum wage of $6.50 per hour, and the cost of piping gasoline to Portland, Ore., from Washington state.

The FTC launched an investigation a year ago, at the request of Sen. Barbara Boxer, D-Calif., to look into the causes of a spike in gas prices in California. Wyden said federal officials told him in June that they had expanded the investigation to other Western states.

The FTC disclosure comes on the eve of a meeting scheduled Wednesday in which the FTC - barring last-minute changes - is expected to seek to block BP Amoco's proposed acquisition of Arco.

Wyden opposes the deal and said the FTC letter is another indication the deal should not go forward.

"That merger as written today would be poison for West Coast consumers because it would compound problems that the Federal Trade Commission told me today are already serious," he said.

But Dozier said the acquisition would have no effect on gas prices in the West.

The deal "doesn't change anything in terms of refining or marketing on the West Coast," she said, adding that Oregon oil prices are a "different subject" from the merger.