Sunoco Closing to Leave 2 Refiners With 86% of East Coast Market
Stock Chart for Sunoco Inc (SUN)
Gasoline prices from Florida to Maine will probably rise after Sunoco Inc. (SUN)’s planned closing of a Philadelphia refinery this year makes the market less competitive, the American Antitrust Institute said.
Sunoco’s inability to find a buyer, which may lead to a shutdown, would give PBF Energy Inc. (PBF) of Parsippany, New Jersey, and Houston-based ConocoPhillips control of 86 percent of the region’s refining capacity, Diana Moss, an American Antitrust Institute director, said today in a testimony for a hearing of the Joint Economic Committee of Congress.
Scarce supplies and constraints on pipelines and storage capacity probably will cause refined-product prices to climb along the U.S. East Coast more quickly than elsewhere, she said.
“Such circumstances can create incentives for firms to exercise market power through unilateral or coordinated conduct, and are therefore important to monitor,” Moss said.
The Obama administration was criticized by Republicans as gasoline prices at the pump climbed to a 2012 high of $3.936 on April 4. Regular gasoline, averaged nationwide, fell 1 cent to $3.83 a gallon yesterday, the lowest since March 14, according to travel adviser AAA.
Sunoco is selling its Philadelphia refinery, the world’s oldest continuously operating petroleum facility, which may be closed by July if the sale fails. The company closed its Marcus Hook, Pennsylvania, plant, last year, and ConocoPhillips (COP) has also idled its Trainer plant in the state.
The Philadelphia and Marcus Hook facilities accounted for about 50 percent of East Coast refining capacity.
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