Guam Senator Michael San Nicolas says it's been 17 years since the Federal Trade Commission determined the merger of Exxon and Mobil Corporations suggested that Guam's wholesale and retail fuel market might be "subject to coordination" as in monopoly manipulation of gas prices upward.
What's happened and what's been done since then?
Senator San Nicolas has introduced Resolution 215-34, requesting that the FTC conduct a review of the current trade practices and market concentration of Guam's wholesale and retail fuel market. In 2000, the FTC's review of the merger of Exxon and Mobil, ordered the divestiture of certain assets in the Northeast, Mid-Atlantic and Guam markets. The merger at the time formed the third largest corporation in the world.
In Federal Trade Commission Decision and Order Docket No. C-3907 [Exhibit F], the FTC determined that the merger of Exxon Corp. and Mobil Corp. would create a highly concentrated market on Guam and that the market would be "subject to coordination." In ordering the divestiture of Guam assets, the aim of the Federal Trade Commission was to remedy the "lessening of competition in the importing, terminating, wholesale and retail sale of fuel on Guam" [Exhibit F, Page 21].
Senator San Nicolas's resolution would seek a follow up review of the current fuel market conditions on Guam by the FTC, specifically as it applies to the FTC order relative to the merger.
"The Federal Trade Commission already looked at the highly concentrated market on Guam and determined it would be subject to coordination if assets were not divested. We are seeking the Federal Trade Commission's follow up review to determine if it's divestiture order in 2000 accomplished its goal of a truly free and fair marketplace," said Senator San Nicolas.
Gasoline on Guam often comes from Singapore and in an extensive study done by the Office of Senator San Nicolas last year, it was determined that in 2000 the difference between the price of Singapore oil and Guam fuel was $1.07 but that difference in price has ballooned to $2.28 as of January 2016.
"Over the past year my team and I have exhaustively researched the circumstances surrounding our gas prices. After reviewing the findings and orders of the Federal Trade Commission relative to the Exxon Mobil merger, it is clear the intent was to have a more competitive fuel market. Price behavior at the retail level does not reflect that and we need to have the FTC review whether or not post-merger behavior is consistent with the purpose for ordering the asset divestiture," San Nicolas said.
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