Abstract

http://ssrn.com/abstract=1596166
 
 

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Petroleum Mergers and Competition in the Northeast United States


Christopher T. Taylor


U.S. Federal Trade Commission - Bureau of Economics

Louis Silvia


Government of the United States of America - Federal Trade Commission

April 26, 2010


Abstract:     
Sunoco’s 2004 acquisition of El Paso’s, New Jersey refinery and Valero’s 2005 acquisition of Premcor’s Delaware refinery significantly consolidated refinery control in the U.S. Northeast. The Federal Trade Commission investigated both transactions but challenged neither. We examine the FTC’s enforcement rationale and test whether these mergers were associated with post-merger price increases in either gasoline or diesel at retail and wholesale levels. Our findings indicate that the transactions were largely competitively neutral. There was some indication that some unbranded rack prices may have increased after the mergers, but this result was not robust across controls or assumptions. In some other instances, prices in merger affected areas may have fallen relative to prices elsewhere after the transactions.

Number of Pages in PDF File: 48

Keywords: Merger retrospectives, Petroleum industry, Horizontal market structure

JEL Classification: L1, L41, L71

working papers series


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Date posted: April 29, 2010  

Suggested Citation

Taylor, Christopher T. and Silvia, Louis, Petroleum Mergers and Competition in the Northeast United States (April 26, 2010). Available at SSRN: http://ssrn.com/abstract=1596166 or http://dx.doi.org/10.2139/ssrn.1596166

Contact Information

Christopher T. Taylor (Contact Author)
U.S. Federal Trade Commission - Bureau of Economics ( email )
601 Pennsylvania Avenue, NW
Antitrust Division
Washington, DC 20580
United States
Louis Silvia
Government of the United States of America - Federal Trade Commission ( email )
601 New Jersey Ave., NW
Washington, DC 20580
United States
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