Refiners Slip as Biden Asks FTC to Probe Firms For High Pump Prices

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Refiners Slip as Biden Asks FTC to Probe Firms For High Pump Prices
Credit: © Reuters.

By Dhirendra Tripathi – Shares of refiners trended lower Wednesday after President Joe Biden ordered Federal Trade Commission to redouble probe of energy companies for possible anti-competitive or "illegal conduct" in the market.

Phillips 66 (NYSE: PSX ) and Valero (NYSE: VLO ) fell around 1%. Marathon Petroleum (NYSE: MPC ) rose 0.2%. Shares of integrated energy companies like Chevron (NYSE: CVX ) and Exxon Mobil (NYSE: XOM ) pared gains to trade almost flat. ADRs of Shell (NYSE: RDSa ) were flat, too. Integrated energy companies have both upstream operations like exploration and production as well as downstream functions like refining and marketing of crude derivatives and thus better positioned to withstand regulatory action. 

Biden’s letter follows his direction to the antitrust regulator a few months back, routed through the director of the National Economic Council, to go behind reasons for spiraling gas prices. In his latest directive, Biden said further action is needed since “prices at the pump have continued to rise, even as refined fuel costs go down and industry profits go up."

The president pointed out that there is an “unexplained large gap between the price of unfinished gasoline and the average price at the pump.”

"I therefore ask that the Commission further examine what is happening with oil and gas markets, and that you bring all of the Commission's tools to bear if you uncover any wrongdoing," the letter said.

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