Oil companies, like casinos, run a rigged game. Neither our corporate controlled political leaders nor corporate controlled media are willing to print the story. Hereinbelow, from the now 20-year-old and ever-expanding Barbwire Oilogopoly archive, is a brief outline of how the price at the pump is as rigged as any five-reel slot machine, the only difference being that the slot may pay off once every 500 years or so.
I sent the following to editors of major newspapers all over the country in 1996. None bit.
The foundation for the current spike in retail gas prices has been cleverly laid over the past 14 (now 26) years. The past six weeks are just a warning of things to come. The monopolists really have developed a better mousetrap. You and I are in the cage. John D. Rockefeller would be proud.
While we were sleeping, BigOil came up with a new Monopoly game and none of the mainstream media have been able to so much as categorize the obvious.
• The California cancer spreads: The national media have missed the story behind the current spike in gas prices. I have yet to see any reportage, let alone analysis, as to the real reason why California price rises led the nation when 93 percent of western gas comes from domestic crude. The answer lies in 14 (now 26) years of clever cut-throat competition designed to let ARCO take the point in eliminating independent retailers through a “price zone” scheme. I have evidence that all the BigOil “majors” participate in this oligopolistic pricing practice. This is the unreported, underlying reason why prices rise instantly and uniformly, but fall slowly. The strategy kills small dealers, which is the point.
• This year (1996) saw the test marketing of a national price fixing strategy. I have legislative and court records and inside people. I am also following one neverending court action which could tip the scales. I wrote a 7,000-word series on the gas price-fixing issue.
• Independent dealers either get branded or get out. California had more than 20,000 gas stations in 1972. Today (1996), only about 9,700 remain. Four or five major oil companies now control 75 percent of the retail business in Southern California. My analysis answers the magic question: How could west coast gas prices be the highest in the U.S. when 93 percent of west coast crude comes from California and Alaska (from which we just began exporting to Japan after a 23-year ban. Go figure.) The other 7 percent comes mostly from Canada and a trickle from Asia. All of the above is non-OPEC oil.
• BigOil acts like Alexandre Dumas’ Corsican Brothers. The psychic monopolists are able to telepathically fix prices without ever conspiring in conversation, which would violate U.S. anti-trust law.
• The Smoking Gun, 1982’s biggest hit: BigOil set the stage for the most recent round of price gouging more than 14 (now 26) years ago. I have the “smoking gun” internal memo by the president of a major oil company (ARCO) delineating the marketing strategy.
• The point guard theory of price fixing: Let one Brother dominate a region until all the little guys are either chewed up, swallowed or spit out. I have sworn testimony and statements from gas retailers as to the grand design. One even says his BigOil supplier forced him to sell gas at retail cheaper than he bought it wholesale. All part of God’s plan.
• Hide in plain sight: Utilize any news story to raise prices quickly and only lower them slowly. Fill the air with media flak to obscure the facts, as has been successfully done in the current “crisis.”
• Pull the ladder up behind you. BigOil’s arrogance is such that they can fix prices with impunity and buy lawmakers to consolidate their power. Their favorite preserve is the easiest place to buy influence: state legislatures. Some markets in the U.S. already have a monopoly controlling the price of gasoline.
• Back to the future: The goal first set forth in the 1982 Smoking Gun Memo is now being achieved industry-wide: competition on style, not substance. Gimmicks, contests and big TV budgets will create the image of competition where none exists. The once and future myth of price competition will hearken back to the 1950s, only at two bucks a gallon. (Gas was just over a dollar a gallon when this was written.)
• The wild price spikes of ’96 could return at any time in the future. Any news, good or bad, can be manipulated as an excuse for price increases.
• BigOil refines the scam. The major U.S. oil companies have refined their method of fixing retail prices to a point where they can launch it nationally when the opportunity presents itself.
• The Grand Design. Through a clever legal strategy, which has so far even survived a loss in court, the Majors manipulate prices to rise quickly, fall slowly and squeeze independent retailers out of business in the process. One court challenge, now in its sixth year, could do serious damage to the scheme.
• The future: ghost stations with no employees, just an ATM card slot. They are already popping up all over Texas. Even the slob in the slot will be obsolete.
• The fix for price fixing: a little old fashioned big government trust-busting. Make the current clever price fixing method illegal. Tighten regulation and mandate disclosure of “internal money laundering.”
A beleaguered ARCO retailer’s statement to a Nevada legislative committee back in the 1990s has proven chillingly prescient: “When oil is $5.00 a gallon, the only thing you can be sure of is that ARCO will be at $4.98.”
Happy motoring on Memorial Day, if you can afford it.
Be well. Raise hell.
Andrew Barbano is a 39-year Nevadan and editor of NevadaLabor.com. E-mail barbano@front page.reno.nv.us. Barbwire by Barbano has originated in the Tribune since 1988.