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The decision also comes as oil prices have become a political imperative for US President Joe Biden, exacerbated by new concerns that Hurricane Ida could push prices further at the pump.
The Federal Trade Commission is investigating ways to address mergers and acquisitions in the oil and gas industry and is investigating whether gas station franchise networks are pushing up gas prices as part of an effort by the Biden administration to combat higher prices at the pump.
FTC chairman Lina Khan is instructing staff to identify new legal theories to challenge retail gas station mergers and investigate possible collusion by national chains to drive prices up, she said in an Aug. 25 letter to the United Nations. White House economic adviser Brian Deese, obtained by Bloomberg.
The FTC also plans to impose “pre-approval” requirements to discourage oil and gas mergers, including in retail gas markets, which could be illegal.
“In recent decades, retail gas station chains have repeatedly proposed illegal mergers, suggesting that the agency’s approach has not stopped companies from proposing anti-competitive deals,” Khan said.
The FTC plans to ramp up its investigation of abuse in the gas station franchise market, she added.
“We will have to determine whether the power imbalance that favors large national chains allows them to force their franchisees to sell gasoline at higher prices, which benefits the chain at the expense of the franchisee’s grocery business,” Khan said.
Khan said the decision to tighten the requirements was prompted by “significant consolidation” in the sector in recent years. But the decision also comes as oil prices have become a political liability for President Joe Biden, compounded by new concerns that Hurricane Ida could push prices further at the pump.
The Gulf is home to 16% of U.S. crude production, 2% of natural gas production, and 48% of the country’s refining capacity. Gasoline futures rose sharply Monday morning after the Category 4 storm made landfall in Louisiana.
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