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A group of California gasoline station owners filed suit in U.S. federal district court in San Francisco accusing three oil industry giants of fixing gasoline prices across the United States from 1998 to 2001. The suit filed on Tuesday claims that Texaco -- now owned by Chevron Corp. -- and U.S. units of state-owned Saudi Aramco of Saudi Arabia and of Royal Dutch Shell Plc  colluded to set gasoline sold to 23,000 Texaco and Shell stations at artificially high prices. Chevron is named as a defendant because it took over Texaco.

The suit is similar to one filed in 2004 by California gasoline station owners. That case was dismissed last year by the U.S. Supreme Court.

Plaintiffs' attorney Joseph M. Alioto of San Francisco said the top U.S. court rejected the former case because it sought to prove only that the three corporations agreed to fix prices. This time, Alioto said, he and his fellow attorneys will attempt to prove unfair competition laws were broken.

"All of this started at the Masters Golf Tournament," Alioto told Reuters on Wednesday. "The guy from Shell got a brainstorm while he was watching the pros hit those pebbled balls around and called the CEO of Texaco."

Heads of Shell Oil, Texaco and Saudi Refining began meeting monthly in 1996, the lawsuit says.

By late 1997, Shell and Texaco were ready to form an alliance but the Saudi representative was not, Alioto said, so Shell and Texaco in January 1998 formed Equilon to refine crude oil and to sell gasoline in 32 states, mainly in the U.S. West and Midwest.

By mid-1998, Alioto claims, the Saudis joined with Shell and Texaco and the three formed Motiva for refining crude and selling gasoline in 27 states, mainly in the U.S. Gulf Coast region and the eastern U.S.

The suit asks for class-action status. Some stations lost $10,000 or more a month because of what he alleged were practices that raised prices by cutting competition.

On Wednesday, Shell Oil representative Sarah Andreani said that Shell, Equilon and Motiva were "carefully and extensively reviewed by the (U.S.) Federal Trade Commission and by several state attorneys general prior to their formation -- and earlier this year, the U.S. Supreme Court upheld a decision that neither Shell nor the joint ventures violated any antitrust law."

In 1998, at a time when U.S. crude oil prices dipped to $10 a barrel -- they are near $70 now -- gasoline prices at Texaco and Shell stations rose.

"With inflation taken into account, in 1998, oil prices were at their lowest since The Depression," said Alioto. "Both Shell and Texaco (by their U.S. alliance) had substantially reduced their costs.

"In the face of these economic factors, they agreed to raise the prices" for gasoline, Alioto said.


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