The Car and Truck Fleet and Leasing Management Magazine

Supreme Court Rules in Favor of Oil Companies

March 02, 2006

WASHINGTON, D.C. --- The U.S. Supreme Court this week ruled that a Texaco and Shell Oil joint venture didn’t violate antitrust law when it set pump prices in the Western U.S., according to a report in the Los Angeles Times. Gas station dealers, consumer groups and their attorneys had argued that the joint venture inflated prices and forced dealers out of business back in the late 1990s. They also argued that the price setting violated antitrust laws. But the justices disagreed, upholding a U.S. District court decision that neither Shell nor the joint ventures violated antitrust law. In 1998, the joint venture consolidated the refining, marketing and retail operations of Texaco and Shell in the Western U.S. Shell and Texaco dealers saw gasoline prices jump by 40 cents a gallon in Los Angeles within a year after the joint venture's formation. This was at a time when crude oil prices were dropping. Dealers said the price hikes led to many station closures and reduced competition. The justices voted 8-0 in favor of the oil companies. Justice Clarence Thomas wrote the decision. Texaco sold its stake in the joint venture, called Equilon Enterprises, when it merged with Chevron in 2001.
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