Last month, a federal judge signed a final judgment that prohibits Valero Energy Corporation (VLO) from buying oil storage and distribution terminals in Martinez and Richmond for the next 10 years.
Both facilities are owned by Plain All American Pipeline, L.P. (PAA), and are the only facilities not owned by one of the five major petroleum manufacturers.
In a statement published on October 12, California Attorney General Xavier Becerra said this ruling ensured market competition and prevented monopolies. “California will protect its consumers and competition so that our State’s economy – the sixth largest in the world – can thrive,” he said in a statement.
The judgment prohibited all affiliates of Valero from acquiring or seeking to acquire the two oil terminals in Contra Costa County. Any company that attempts to buy the facilities is required to file a written notice to the federal district court.
Earlier this year, Becerra filed a preliminary injunction against an assets purchase agreement between Valero and Plain All American, which he claimed “could lead to higher gas prices for consumers in Northern California.”
The Federal Trade Commission (FTC) reviewed the request, but decided not to pursue any regulatory action to terminate the transaction. Later, District Judge William Alsup denied the state’s request to stop the deal.
Richmond Confidential reported that Valero backed out of the purchase plan two months after the case filed.
The California gasoline market has always been closely watched by attorneys general. Based on U.S. Energy Information Administration, the average retail prices of gasoline and diesel in California is almost 24 percent higher than the national average.
This is not the first time Valero attempted to purchase these oil terminals in Northern California. In 2005, the company bid $2.8 billion to acquire control of pipelines in Martinez and Richmond, which were then owned by Kaneb Services and Pipe Line Partners. The FTC investigated and terminated the deal due to antitrust litigation.
Neither Valero nor Plains All American responded to requests to discuss the case.