Attorney General Lockyer Calls Shell's Sale Of Bakersfield Refinery Potential Boon For Drivers
Says Deal With Flying J, If Closed, Would Help Prevent Further Price Instability
(SACRAMENTO) – Attorney General Bill Lockyer today said Shell Oil Company’s (Shell) sale of its Bakersfield refinery to Flying J, Inc. would benefit consumers by ensuring the continued operation of the facility, preventing further destabilization of the state’s gasoline market and helping suppress future price spikes at the pump.
“While we have to study the details of the sale, the continued operation of Shell’s Bakersfield refinery would be a victory for California drivers,” said Lockyer. “This state’s gasoline market is dysfunctional and plagued by chronic supply problems. The people who ultimately pay the price are our drivers, who shell out more at the pump than any other consumers in the nation. California drivers cannot afford the loss of this facility, and they would be the biggest beneficiaries if Bakersfield remains open.”
After Shell announced it planned to close the Bakersfield refinery effective October 1, 2004, Lockyer launched an antitrust investigation. As part of that probe, he hired a consultant who concluded the refinery could be run profitably and that a sale could be structured to make financial sense for Shell and the buyer. Lockyer urged Shell officials to pursue a sale. The company on August 13, 2004 delayed the closure and announced it had reached an agreement with Lockyer to make a good-faith effort to sell the facility.
Closure of the transaction announced today is contingent on Shell and Flying J receiving regulatory approvals. Shell officials said they expect to receive those approvals before March 31, 2005, the close of the first quarter.