Lawmakers told oil executives today that a "merger mania" in their industry has reduced competition and allowed oil and gasoline prices to increase significantly. "These price increases cannot be explained solely by increased cost of oil," said Senator Dianne Feinstein (Democrat from California), before chief executives of the country's six largest oil and refining companies prepared to testify before the Senate Judiciary Committee on Capitol Hill. The executives defended the industry's consolidations, arguing that large companies are needed in order to compete in oil exploration and in the globalize market. "We need U.S. energy companies that have the scale and financial strength to make investments, undertake the risk, and develop the new technologies," said Rex Tillerson, chairman of Exxon Mobile Corporation, the world's largest publicly traded oil company. Exxon Mobile last year reported $36 billion in profit. But Republican and Democratic Senators questioned the executives' statements. Senator Chuck Schumer (Democrat from New York) said it was "naïve" for executives to suggest that consolidation had no impact. "We should seriously explore divestiture, particularly on the downstream refining and retail areas," Schumer said. Committee Chairman Arlen Specter (Republican from Pennsylvania) said he will soon consider legislation to strengthen antitrust laws on oil company mergers to allow closer scrutiny of their impact on competition. Senator Mike DeWine (Republican from Ohio) said the executives weren't receiving criticism because their companies were "big." "What is not legal is when a company abuses its size or uses unfair tactics to shut out its competitors or harm competition," DeWine said.
