Replies

If it became the law that houses could only be sold through a cabal of 5 or so big real estate firms - REMAX, Century 21, etc - is that a free market??

Which is the cabal of 5 oil comapnies? The retail gasoline market is well diversified under any and every standard that is sued to measure market concentration.

The problem with debates about oil and gas is that 95% of people know nothing about the industry, yet feel no reason offering their opinions on it.

Actually, FTC Data show that all but four states had wholesale market concentrations greater than an HHI score of 1000, and four of the five Petroleum Administrative Defense Districts (PADDs) had refinery market concentrations greater than 1000. The East Cost (PADD I) had an HHI of 1943 in 2003. USDOJ merger guidelines characterize HHIs greater than 1000 as "Concentrated" and those above 1800 as "Highly Concentrated". I would argue that, since demand is inelastic in the short term, firms get more power at lower levels of market concentration in the gasoline industry than in others. I don't have data on retail market concentrations, but given the fact that in most states there are large numbers of either franchised or corporate retailers (as opposed to independents), that the retail market is not easily separated from the wholesale market (both are simply "downstream").

5 Companies in the US with refining capacity over 1M bbl/day:
Conoco Phillips: 2,198,400
Exxon Mobil: 1,846,500
BP: 1,504,500
Valero Energy: 1,449,528
Chevron Texaco: 1,006,901

8 Companies with refining capacity over 500K bbl/day
Marathon Oil: 948,000
Sunoco: 900,000
Premcor: 768,400
Koch Industries: 763,126
Motiva Enterprises: 746,500
PDV America: 719,300
Royal Dutch Shell: 597,200
Tesoro: 562,500

Source: www.eia.doe.gov