FTC to Put Oil & Gas Mergers Under Closer Review

Beyond Allies Building a Network of Support

The commission will start an investigation into “abuses” in the franchise market for fuel stations

CONCERNS OVER RISING GAS PRICES sparked a conversation between the Federal Trade Commission (FTC) and the White House, leading the commission to say it will take a closer look at merger-and-acquisition (M&A) activity in the oil and gas industry.

According to Reuters, FTC Chair Lina Khan told the White House that the commission will seek to deter “unlawful” mergers in the industry. Her comments were contained in a letter to Brian Deese, director of the National Economic Council.

The letter came after the White House raised concerns about prices at the pump. In a letter to Khan on Aug. 11, Deese questioned why “gas prices tend to rise more quickly to adjust to spikes in oil prices than they fall when the price of oil declines.”

Among the steps the FTC intends to take, Khan said the commission will start an investigation of abuses in the franchise market for retail fuel stations. According to the news outlet, the FTC commissioner also said she was concerned that the FTC’s approach to merger reviews in recent years had “enabled” significant consolidation in the industry and created “conditions ripe for price coordination and other collusive practices.”

She added that the FTC would “identify additional legal theories” to challenge mergers in which dominant players in the industry are buying up family-run businesses.

According to NACS, roughly 20 percent of the 121,000 U.S. convenience stores that sell gasoline, or 24,900 stores, are owned by a company with 500-plus stores; 69,342 of U.S. c-stores that sell fuel are onestore operators.

“The fuels retailing businesses is incredibly diverse and competitive,” Jeff Lenard, NACS’ vice president of strategic initiatives, told NACS Daily. “There are more than 121,000 convenience stores that sell fuel, and these stores are collectively owned by 70,000-plus businesses. If there were actual wrongdoing in any corner of the industry, that should be investigated, and the law should be enforced.”