US drops probe of Shell plan to shut Bakersfield oil refinery

London (Platts)--26May2005

The US Federal Trade Commission dropped a probe into Shell's plan to close the
Bakersfield oil refinery in California after finding no evidence of any scheme
to increase gasoline prices, the commission said Wednesday. 

The FTC started an investigation in March 2004 on concern that Shell Oil
Products US, part of Royal Dutch/Shell Group, was shutting the 70,000 b/d
refinery to reduce capacity in an attempt to raise gasoline prices in
California, where motor fuel already costs more than in other parts of the US.
"The Commission found no evidence to substantiate this concern," the FTC said
in a statement on its website. Shell announced in November 2003 that it
planned to close the Bakersfield refinery, citing a drop in production of San
Joaquin Valley crude that supplies the plant and the company's efforts to
improve profitability in its oil-refining business. 

Shell has since agreed to sell the refinery, which started production in 1932,
to Big West of California, a subsidiary of Flying J, which intends to keep it
running.

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