VIA FACSIMILE &
REGULAR MAIL
Federal Trade Commission
Office of the Secretary
600 Pennsylvania Avenue, N.W.,
Washington, D.C. 20580.
Re: Consent Agreement in the Exxon Mobil Merger
Dear Sir/Madam:
By way of introduction, the Office of Advocacy of the U.S. Small Business Administration (SBA) was established by Congress under Pub. L. No. 94-305 to represent the views of small business before federal agencies and Congress. On October 8, 1999, the Office of Advocacy submitted a letter to the FTC expressing concerns about the potential long-term effect of the numerous oil mergers on the various small business sectors of the oil industry. On November 30, 1999, the Federal Trade Commission (FTC) issued a Complaint and a proposed Consent Agreement for the merger of Exxon Corporation (Exxon) and Mobil Corporation (Mobil). The FTC has requested comments on the proposal.
Although the proposed agreement provides provisions that will be beneficial to several small businesses in the oil industry, the Office of Advocacy is concerned about the lack of a provision to assure the supply and transport of crude oil for small refiners. As the Office of Advocacy stated in its letter on October 8th, if the small refiners are unable to obtain crude at a reasonable price, they will be forced out of the market. If the small refiners exit the market place, the large companies will have complete control over petroleum prices for the independent non-affiliated gasoline dealers, the home heating oil companies, the agricultural diesel users, the concrete manufacturers, etc. The end result will be higher prices for the consumer.
Advocacy asserts that a simple provision requiring the acquirer to provide a contract for access to transport and supply of crude oil to small independent refiners would remedy this situation and assure continued competition. Such a provision will assure continued competition for all levels of the oil industry
Thank you for allowing me to comment on this important topic. If you any questions, please feel free to contact Jennifer Smith or me at (202) 205-6533.
Sincerely,
Jere W. Glover
Chief Counsel
Office of Advocacy
Jennifer A. Smith
Assistant Chief Counsel
for Economic Regulation
cc: Chairman Pitofsky