NEW YORK -- With oil supplies abundant and gasoline cheaper than bottled water, consumers are unlikely to feel any immediate impact from a merger of Exxon and Mobil, the United States' two biggest oil companies, industry executives and some consumer groups contended Tuesday.
They expect antitrust regulators to insist that the combined Exxon-Mobil sell off some operations to keep it from using its considerably increased bulk to raise prices."The combination in and of itself won't have any impact," said Robert Hanfling, a Washington consultant and former Energy Department official. In fact, he and others argued, the deal may ultimately prove beneficial to consumers if it leads to stronger exploration efforts that ensure a plentiful supply of oil in future.
But at the gasoline pump, some people were skeptical.
"They'll put their marketing skills together and get as much for their gasoline as the market will bear," said Carl Fischer, a Dallas motorist.
And Aaron Manning, a New York cabdriver, saw only dire consequences as he bought gasoline at an Exxon station in Manhattan. "It's going to be a monopoly, and it's going to drive the price up," he insisted. "We will have to pay whatever they put here." And if gasoline prices go up, he said, he wants cab fares to follow, but he doubts that they will.
The divergent views underline the suspicions that some consumers have of increasing giant companies, and the ambivalence that even some in the industry have, although oil executives argue that a bigger, more efficient oil giant should benefit consumers.
Charles DiBona, former head of the American Petroleum Institute, the main trade association for large oil companies, said the Exxon-Mobil deal would give the combined company more muscle to negotiate with foreign governments for drilling rights or to build offshore platforms costing $1 billion. That, in turn, should help keep prices under control when demand picks up.
Paul Hilliard, president of a small oil company in Lafayette, La., agreed. The Exxon-Mobil deal is "good for consumers, at least in the short term," he said, partly because he expected the combined company would find it easier to make a profit.
But the low prices and more efficient giant oil corporations are likely to put more pressure on small companies like his family owned Badger Oil Corp.
Others who see their businesses threatened by oil-industry consolidation include Emanuel Silvia, a service-station operator in North Truro, Mass. "I think eventually they're all headed to do away with people like myself -- push us little guys out of business," said Silvia, proprietor of Sonny's Gulf. "Exxon's going to have more buying power. They'll control the market and the prices."
Some consumer groups expressed concerns whether regulators would over the longer term be able to restrain the market power of a colossus like the combined Exxon-Mobil.
"If the antitrust authorities fail to block a merger between the No. 1 and No. 2 United States oil companies, it will predictably lead to more mergers and an even higher level of industry concentration," leaders of two groups founded by Ralph Nader said in a statement.
"The proposed merger will predictably raise prices, especially in the areas where Exxon and Mobil compete directly," contended James Love, director of the Consumer Project on Technology, and Robert Weissman, co-director of Essential Action.
Politicians also weighed in, seizing a seemingly irresistible chance to suggest that it might be a mistake to permit partial restoration of John D. Rockefeller's Standard Oil Co., which was broken up in 1911.
Sen. Mike DeWine, R-Ohio, the state where Rockefeller began his career, said he would ask the Federal Trade Commission to delay its decision on another pending industry combination, that of British Petroleum and Amoco, which company officials have said they hope to complete by year-end.