May 17 (Bloomberg) -- President George W. Bush allowed an increase in oil refinery mergers to go unchecked since he took office and may have contributed to the highest gasoline prices in 20 years as the November election approaches.
The Bush administration approved 33 takeovers totaling $19.5 billion,
on top of 21 deals worth $7.3 billion under President Bill Clinton, Bloomberg data shows. Reduced supplies were already pushing up gas prices in Clinton's term, according to a Federal Trade Commission study conducted after pump prices rose to more than $2 a gallon in Milwaukee and Chicago in 2000.
``We're in a much worse position than we were when the federal government broke up the Rockefeller oil companies of the early 1900s,'' Jon Meade Huntsman, a registered Republican and founder of Salt Lake City-based Huntsman Co., the largest privately held chemicals maker, said in an interview. ``The average guy on the street is getting killed because this administration does not care.''
Refiners Benefit
Under Bush, the FTC hasn't tried to block any proposed refinery takeovers. During Clinton's eight years in office, the government sued once to block an oil industry merger. In February 2000, the FTC sought to stop BP Plc's $33.1 billion purchase of Atlantic Richfield Co. after concluding the combination could lead to higher prices of oil pumped from Alaska. BP completed the purchase in April 2000 after agreeing to sell oil fields in Alaska and terminals and pipelines in Oklahoma.
The rise in gasoline prices helped refiners generate the highest margins from refining crude oil into gasoline and other fuels in the first quarter since at least 1990. ConocoPhillips, the largest U.S. oil refiner, last month posted its biggest quarterly profit since the 2002 acquisition that formed the company. ChevronTexaco Corp., the second-biggest U.S. oil producer, said earnings rose 33 percent to the highest level since a 2001 merger formed the company. Chevron's first-quarter refining profit doubled.
From 1993 to 2003, the market share of the five-biggest U.S. refiners grew from 35 percent to 52 percent, according to Public Citizen. For the top 10 refiners, market share rose from 56 percent to 79 percent. The Consumer Federation of America says 77 percent of the market on the East Coast and 67 percent on the West Coast were controlled by the top four refiners as of 2000. Between 1977 and 2002, the number of U.S. refineries dropped to 153 from 282. Refining capacity over that period has increased 2.4 percent to 16.8 million barrels a day from 16.4 million barrels a day, according to the Energy Department. U.S. demand for gasoline has grown 27 percent in that period.
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