NEWS
MEMORANDUM OPINION AND JUDGMENT, DISTRICT OF COLUMBIA COURT OF APPEALS. Counsel: Don Allen Resnikoff, Esquire; Alphonse M. Alfano, Esquire; Matthew M. Moore, Esquire Nos. 19-CV-559 & 19-CV-542 TERREFE BERHANU; ETHIO, INC.; AND EZEMA, INC., APPELLANTS / CROSSAPPELLEES, V. LANDMARK PETROLEUM, LLC; CAPITOL PETROLEUM GROUP, LLC; AND EYOB MAMO, APPELLEES / CROSS-APPELLANTS. Appeal from the Superior Court of the District of Columbia (CAB-8753-16) (Hon. Michael L. Rankin, Trial Judge) (Argued June 18, 2020 Decided September 30, 2020) Before BLACKBURNE-RIGSBY, Chief Judge, and MCLEESE and DEAHL, Associate Judges.
Uploaded by
Don Resnikoff
"We vacate the Superior Court’s judgment and remand for further proceedings. The evidence established, as a matter of law, that the rent abatement and consignment agreement—i.e., the rights and obligations under the 2009 oral modifications to the party’s written agreements—were a package deal and both were assigned to Landmark. Landmark had no right to terminate the rent abatement while leaving the consignment agreement in place, as it purported to do in its termination letters to Mr. Berhanu."
Download as PDF, TXT or read online from Scribd at https://www.scribd.com/document/478530874/MEMORANDUM-OPINION-AND-JUDGMENT-DISTRICT-OF-COLUMBIA-COURT-OF-APPEALS-Counsel-Don-Allen-Resnikoff-Esquire-Alphonse-M-Alfano-Esquire-Matthew-Moore
OR SEE PDF images BELOW
***
Uploaded by
Don Resnikoff
"We vacate the Superior Court’s judgment and remand for further proceedings. The evidence established, as a matter of law, that the rent abatement and consignment agreement—i.e., the rights and obligations under the 2009 oral modifications to the party’s written agreements—were a package deal and both were assigned to Landmark. Landmark had no right to terminate the rent abatement while leaving the consignment agreement in place, as it purported to do in its termination letters to Mr. Berhanu."
Download as PDF, TXT or read online from Scribd at https://www.scribd.com/document/478530874/MEMORANDUM-OPINION-AND-JUDGMENT-DISTRICT-OF-COLUMBIA-COURT-OF-APPEALS-Counsel-Don-Allen-Resnikoff-Esquire-Alphonse-M-Alfano-Esquire-Matthew-Moore
OR SEE PDF images BELOW
***
Court enters partial summary judgment on D.C. class action brought by plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema against Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty,
Excerpt
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION ORDER
This District of Columbia Antitrust Act and Retail Service Station Act (“RSSA”) class action comes before this court on defendants Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty, LLC’s motion for summary judgment; plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema, Inc.’s opposition; and defendants’ reply. For the reasons stated herein, the court grants the motion in part. [Motion granted on RSSA count 3; antitrust counts 1 and 2 stand.]
Background
The Complaint alleges the following pertinent facts. Defendants are gasoline wholesalerswho supply Exxon-branded, Shell-branded, Valero-branded, and other brands of gasoline to over sixty percent of the gasoline service stations in the District of Columbia. Plaintiffs are retail sellers of gasoline who sell defendants’ products. Defendants and defendants’ jointly-owned and operated companies use their business acumen, market power, and bullying tactics to compel retail sellers, including plaintiffs, to purchase gasoline from them exclusively at artificially-inflated prices. Defendants’ practice of requiring sellers to enter into exclusive dealing arrangements has not only prevented retail sellers from seeking lower-priced gasoline from other distributors, but has also effectively barred distributors of minor-brand and unbranded gasoline from entering the District of Columbia market. The defendants deny these allegations
* * *
To establish a prima facie RSSA claim, plaintiffs must show that they have a marketing agreement with defendants. Even if plaintiffs were correct that the RSSA does not require thatthey be parties to a written marketing agreement, the court finds that defendants have demonstrated that they are entitled to summary judgment because theyhave shown that it is undisputed they were not parties to any marketing agreement, oral or otherwise, with plaintiffs. Mamo attests that none of the defendants has a marketing agreement or any other contractual, leasehold, or business relationship with plaintiffs. Berhanu’s affidavit, however, does not even address whether plaintiffs have a marketing agreement with defendants, much less refute Mamo’s assertion, and plaintiffs have not come forward with any evidence whatsoever regardingthe existence of such an agreement. Consequently, the court finds that itis appropriateto enter summary judgment in defendants’ favor on plaintiffs’ RSSA claim.
.
Full Order at https://www.scribd.com/doc/304652383/3-10-2016-Ethio-Order-on-SJ-2
Excerpt
SUPERIOR COURT OF THE DISTRICT OF COLUMBIA
CIVIL DIVISION ORDER
This District of Columbia Antitrust Act and Retail Service Station Act (“RSSA”) class action comes before this court on defendants Capitol Petroleum Group, LLC, Anacostia Realty,LLC, and Springfield Petroleum Realty, LLC’s motion for summary judgment; plaintiffs Terrefe Berhanu, Ethio, Inc., and Ezema, Inc.’s opposition; and defendants’ reply. For the reasons stated herein, the court grants the motion in part. [Motion granted on RSSA count 3; antitrust counts 1 and 2 stand.]
Background
The Complaint alleges the following pertinent facts. Defendants are gasoline wholesalerswho supply Exxon-branded, Shell-branded, Valero-branded, and other brands of gasoline to over sixty percent of the gasoline service stations in the District of Columbia. Plaintiffs are retail sellers of gasoline who sell defendants’ products. Defendants and defendants’ jointly-owned and operated companies use their business acumen, market power, and bullying tactics to compel retail sellers, including plaintiffs, to purchase gasoline from them exclusively at artificially-inflated prices. Defendants’ practice of requiring sellers to enter into exclusive dealing arrangements has not only prevented retail sellers from seeking lower-priced gasoline from other distributors, but has also effectively barred distributors of minor-brand and unbranded gasoline from entering the District of Columbia market. The defendants deny these allegations
* * *
To establish a prima facie RSSA claim, plaintiffs must show that they have a marketing agreement with defendants. Even if plaintiffs were correct that the RSSA does not require thatthey be parties to a written marketing agreement, the court finds that defendants have demonstrated that they are entitled to summary judgment because theyhave shown that it is undisputed they were not parties to any marketing agreement, oral or otherwise, with plaintiffs. Mamo attests that none of the defendants has a marketing agreement or any other contractual, leasehold, or business relationship with plaintiffs. Berhanu’s affidavit, however, does not even address whether plaintiffs have a marketing agreement with defendants, much less refute Mamo’s assertion, and plaintiffs have not come forward with any evidence whatsoever regardingthe existence of such an agreement. Consequently, the court finds that itis appropriateto enter summary judgment in defendants’ favor on plaintiffs’ RSSA claim.
.
Full Order at https://www.scribd.com/doc/304652383/3-10-2016-Ethio-Order-on-SJ-2
Oil Powers Bid To Curb Glut
Oil ministers from Saudi Arabia, Venezuela, Russia and Qatar agreed to freeze their output at January levels, provided that other major producers follow suit. The move, the ministers said, was aimed at stabilizing the oil market, which has seen prices fall over 70 percent since June 2014. Speculation about a freeze or possible production cut being agreed to at the meeting had sent oil prices sharply up.
Posted 2-16-2016
Oil ministers from Saudi Arabia, Venezuela, Russia and Qatar agreed to freeze their output at January levels, provided that other major producers follow suit. The move, the ministers said, was aimed at stabilizing the oil market, which has seen prices fall over 70 percent since June 2014. Speculation about a freeze or possible production cut being agreed to at the meeting had sent oil prices sharply up.
Posted 2-16-2016
From GasBuddy: Prices for regular gasoline as of 2/9/2016.
Virginia 1.606
Maryland 1.798
Washington DC 2.002
Virginia 1.606
Maryland 1.798
Washington DC 2.002
Briefing schedule set for District's appeal from the Superior Court's decision dismissing its case against ExxonMobil
The District's appeal was held in abeyance or stayed for about a year-and-a-half, but the Court of Appeals issued an order last month vacating the stay and setting a briefing schedule.
See the order at https://www.scribd.com/doc/294865497/DC-v-Exxonmobil-Order-121015
Recent Washington Post Op-Ed on Exelon-PHI merger offers reprise of DC litigation against gasoline companies
By Robert Weiner and Brendan Agnew
Big energy interests winning against D.C. residents is becoming a familiar story.
In 2013, District Attorney General Irvin B. Nathan sued ExxonMobil, Capitol Petroleum and others for allegedly manipulating prices at the pumps in the District. Exxon’s oil-refining subsidiaries had struck exclusive supply deals with about 60 percent of the city’s gas stations, including almost all of the Exxon, Shell and Valero stations, effectively shutting out competition and allowing them to set retail prices as high as they’d like, the suit argued.
The D.C. Superior Court granted ExxonMobil’s motion to dismiss the case in 2014. ExxonMobil argued that under the District’s Retail Service Station Act, the attorney general had “neither expressed nor implied statutory authority” to investigate gas prices. The regional gasoline distributorships were allowed to keep their supply arrangements. Meanwhile, D.C. gas prices hover above the national average as other regions experience dropping prices.
Because the problem is D.C. law, the law could be changed by the council. D.C. Councilmember Mary M. Cheh (D-Ward 3) proposed an amendment to the law, but the council never voted on it.
For full version see see https://www.washingtonpost.com/opinions/a-history-of-bowing-to-energy-companies/2015/12/31/5a99c648-a836-11e5-9b92-dea7cd4b1a4d_story.html
Costco takes case for Wheaton gas station to court
By Mike Murillo | @MikeMurilloWTOP November 13, 2015
After 37 days of hearings, which created a case file of 9,500 pages, the county’s zoning board decided not to grant a special exception needed for the project to move forward. The county also denied an appeal by Costco. The county found that the box store couldn’t prove that the filling station wouldn’t come with negative health impacts for people living in surrounding communities.
Costco is now appealing the county’s decision in court. Lawyers for the retailer said that station would be safe.
See http://wtop.com/montgomery-county/2015/11/costco-takes-case-for-wheaton-gas-station-to-court/
By Mike Murillo | @MikeMurilloWTOP November 13, 2015
After 37 days of hearings, which created a case file of 9,500 pages, the county’s zoning board decided not to grant a special exception needed for the project to move forward. The county also denied an appeal by Costco. The county found that the box store couldn’t prove that the filling station wouldn’t come with negative health impacts for people living in surrounding communities.
Costco is now appealing the county’s decision in court. Lawyers for the retailer said that station would be safe.
See http://wtop.com/montgomery-county/2015/11/costco-takes-case-for-wheaton-gas-station-to-court/
New Software to Make Reporting Fuel Data to the State Easier
The California Energy Commission is introducing a new, paperless way for the state’s
retail fuel outlets to report their annual A15 retail fuel outlet data that should make the
process more efficient and less time consuming.
Beginning January 1, retail fuel outlet owners will be asked to fill out their data reports
through the Energy Commission’s website, but can continue to submit them on paper
and send them by fax, email, mail and bulk form. The Petroleum Industry Information
Reporting Act (PIIRA) requires all retail transportation fueling stations in California to file
a Retail Fuel Outlet Annual Report (CEC-A15) to the Energy Commission, which uses
the data to analyze fuel supply changes and sales distribution in California.
The new web-based reporting system provides instant feedback to retailers, ensuring
they are entering the data points correctly, automatically fills address information and
eliminates the need for follow-up phone calls that can be time consuming.
Energy Commission staff demonstrated how the new website survey works in a
November workshop. A video recording of the workshop is available on the website.
See energy.ca.gov
The California Energy Commission is introducing a new, paperless way for the state’s
retail fuel outlets to report their annual A15 retail fuel outlet data that should make the
process more efficient and less time consuming.
Beginning January 1, retail fuel outlet owners will be asked to fill out their data reports
through the Energy Commission’s website, but can continue to submit them on paper
and send them by fax, email, mail and bulk form. The Petroleum Industry Information
Reporting Act (PIIRA) requires all retail transportation fueling stations in California to file
a Retail Fuel Outlet Annual Report (CEC-A15) to the Energy Commission, which uses
the data to analyze fuel supply changes and sales distribution in California.
The new web-based reporting system provides instant feedback to retailers, ensuring
they are entering the data points correctly, automatically fills address information and
eliminates the need for follow-up phone calls that can be time consuming.
Energy Commission staff demonstrated how the new website survey works in a
November workshop. A video recording of the workshop is available on the website.
See energy.ca.gov
Convenience/gas chain's costs for switching to EMV credit cards: FROM TESTIMONY OF JARED SCHEELER, MANAGING DIRECTOR, THE HUB CONVENIENCE STORES, INC., ON BEHALF OF THE NATIONAL ASSOCIATION OF CONVENIENCE STORES
Thus far, it has cost approximately $44,500 per store – more than $134,500 for a chain our size – to make the point-of-sale operating systems and fuel dispensers in our three existing stores EMV compatible. At our existing site in Dickinson, which is Mobil-branded, we purchased 6 brand new fuel dispensers even though the existing dispensers had many years of useful life in them. The new dispensers were $17,000 each and the in-store point of sale card
reader was $2,000. So, the upgrade cost us more than $100,000 at this site. Although we made these large investments, because we process our cards at our existing and new Dickinson sites through our fuel brand, ExxonMobil, we cannot accept EMV transactions. That is because ExxonMobil has not yet implemented EMV technology in their card processing network. They are not mandating an in-store terminal switch until October 1,
2016 and they are assuming any liability between now and that date. Once they implement the EMV technology, all ExxonMobil stores will require a software
update. These updates are one part of an annual service package that costs $1,500 per store. For those who don’ t purchase the service package, it’ s about $1,000 for the software upgrade alone. Further, when the upgrade occurs, the store’ s cash registers and credit network will be unavailable for 6-8 hours while the software download occurs. We operate our stores 24 hours per day so this downtime will inconvenience our customers and lose us money. In fact, we
estimate that during the time our stores will be “offline” for the software update, we will lose at least $10,200 in sales as well as labor and overtime costs per store.
* * *
As a small business owner, I am absolutely committed to improving payment card security. I have no problem making investments in effective fraud-prevention measures because retailers already pay the price for the unsecure payment card system. Unfortunately, as discussed in further detail below, this very costly transition to EMV will not reduce fraud as much as it could and should, and my business will continue to suffer from a deeply flawed system.
Banks often claim that they are on the hook for fraud losses. They also claim that they provide a “payment guarantee” to their retailer customers. Frankly, I find these claims offensive because they are false. Let’s be clear, I pay for fraud several times over:
First, I pre-pay for fraud with exorbitant swipe fees, which the card networks have justified as necessary to cover the cost of fraud and fraud prevention. The Federal Reserve’s rules on debit card swipe fees specifically provide for merchants like me to pay 5 basis points (0.05% of the transaction amount) on every transaction to cover banks’ fraud losses. That amount is now higher than the full amount of debit card fraud suffered by the majority of banks covered by the Fed’s rules. And, credit card swipe fees and debit swipe fees for banks not covered by the rules are much higher – ensuring merchants pay for more than 100% of fraud upfront.
Second, I pay for fraud in chargebacks. Despite banks’ false claims of providing a “payment guarantee” to me and other retailers, when a fraudulent charge is made, my company is “charged back” for the amount of the fraudulent transaction about three out of four times. In fact, every year our company pays $600 per store in chargebacks.
Third, if a merchant suffers a data breach, Visa and MasterCard rules require the merchant to pay for any increase in fraud for those breached accounts.
* * *
EMV will not reduce fraud nearly as much as it should : Disappointingly, the card companies have mandated an EMV transition that does not
include a simple and very effective security measure that would substantially reduce fraud losses for everyone, including small business owners like me. Instead of migrating to chip-and-PIN technology in the U.S., the card companies have opted for a transition to chip-without-PIN. This
is true in spite of the fact that the rest of the world has been moving to chip-and-PIN and that the data the card industry has used to justify the move in the United States relies on the use of chipand- PIN, not chip-without-PIN.
URL: http://www.nacsonline.com/News/Press_Releases/2015/Documents/PR102115_Scheeler-Testimony-EMV-HSB-Hearing.pdf
Thus far, it has cost approximately $44,500 per store – more than $134,500 for a chain our size – to make the point-of-sale operating systems and fuel dispensers in our three existing stores EMV compatible. At our existing site in Dickinson, which is Mobil-branded, we purchased 6 brand new fuel dispensers even though the existing dispensers had many years of useful life in them. The new dispensers were $17,000 each and the in-store point of sale card
reader was $2,000. So, the upgrade cost us more than $100,000 at this site. Although we made these large investments, because we process our cards at our existing and new Dickinson sites through our fuel brand, ExxonMobil, we cannot accept EMV transactions. That is because ExxonMobil has not yet implemented EMV technology in their card processing network. They are not mandating an in-store terminal switch until October 1,
2016 and they are assuming any liability between now and that date. Once they implement the EMV technology, all ExxonMobil stores will require a software
update. These updates are one part of an annual service package that costs $1,500 per store. For those who don’ t purchase the service package, it’ s about $1,000 for the software upgrade alone. Further, when the upgrade occurs, the store’ s cash registers and credit network will be unavailable for 6-8 hours while the software download occurs. We operate our stores 24 hours per day so this downtime will inconvenience our customers and lose us money. In fact, we
estimate that during the time our stores will be “offline” for the software update, we will lose at least $10,200 in sales as well as labor and overtime costs per store.
* * *
As a small business owner, I am absolutely committed to improving payment card security. I have no problem making investments in effective fraud-prevention measures because retailers already pay the price for the unsecure payment card system. Unfortunately, as discussed in further detail below, this very costly transition to EMV will not reduce fraud as much as it could and should, and my business will continue to suffer from a deeply flawed system.
Banks often claim that they are on the hook for fraud losses. They also claim that they provide a “payment guarantee” to their retailer customers. Frankly, I find these claims offensive because they are false. Let’s be clear, I pay for fraud several times over:
First, I pre-pay for fraud with exorbitant swipe fees, which the card networks have justified as necessary to cover the cost of fraud and fraud prevention. The Federal Reserve’s rules on debit card swipe fees specifically provide for merchants like me to pay 5 basis points (0.05% of the transaction amount) on every transaction to cover banks’ fraud losses. That amount is now higher than the full amount of debit card fraud suffered by the majority of banks covered by the Fed’s rules. And, credit card swipe fees and debit swipe fees for banks not covered by the rules are much higher – ensuring merchants pay for more than 100% of fraud upfront.
Second, I pay for fraud in chargebacks. Despite banks’ false claims of providing a “payment guarantee” to me and other retailers, when a fraudulent charge is made, my company is “charged back” for the amount of the fraudulent transaction about three out of four times. In fact, every year our company pays $600 per store in chargebacks.
Third, if a merchant suffers a data breach, Visa and MasterCard rules require the merchant to pay for any increase in fraud for those breached accounts.
* * *
EMV will not reduce fraud nearly as much as it should : Disappointingly, the card companies have mandated an EMV transition that does not
include a simple and very effective security measure that would substantially reduce fraud losses for everyone, including small business owners like me. Instead of migrating to chip-and-PIN technology in the U.S., the card companies have opted for a transition to chip-without-PIN. This
is true in spite of the fact that the rest of the world has been moving to chip-and-PIN and that the data the card industry has used to justify the move in the United States relies on the use of chipand- PIN, not chip-without-PIN.
URL: http://www.nacsonline.com/News/Press_Releases/2015/Documents/PR102115_Scheeler-Testimony-EMV-HSB-Hearing.pdf
On Labor Day, a gallon of gasoline costs just $2.40 on average nationwide, AAA reported.
South Carolina currently has the cheapest gas at just $2 a gallon on average and Alaska has the most expensive at $3.40 per gallon.
Gas prices have dropped as the cost of oil has tanked for the last year. The price of a barrel of oil has dropped from $100 to just $46. Subsequently, the price of gas has slid by more than $1 per gallon since Labor Day 2014.
“It is unbelievable that drivers are ending their summer vacations with the lowest gas prices for this time of year in more than a decade,” Avery Ash, an AAA spokesman, said in a statement.
Here are some reports from the internet of higher prices at some stations in DC for Labor Day or shortly before (check links for source of report)
$3.99
Exxon 339 Pennsylvania Ave SE & 4th St SE
Washington - SE
phatpath
$3.59
Exxon 5030 Connecticut Ave NW & Nebraska Ave
Washington - NW
Carp100
$3.46
Exxon 4861 Massachusetts Ave NW & 49th St NW
Washington - NW
JanickBijoux
$3.39
Exxon 200 Massachusetts Ave NE & 2nd St NE
Washington - NE
gaspayne
$3.29
Exxon 4244 Wisconsin Ave NW & Warren St
Washington - NW
GB_Direct
$3.29
Exxon 1201 Pennsylvania Ave SE & 12th St SE
Washington - SE
GB_Direct
$3.29
Exxon 1601 Wisconsin Ave NW & Q St NW
Washington - NW
janette09015
$3.04
Exxon 3535 Connecticut Ave NW & Porter St
Washington - NW
davez11
South Carolina currently has the cheapest gas at just $2 a gallon on average and Alaska has the most expensive at $3.40 per gallon.
Gas prices have dropped as the cost of oil has tanked for the last year. The price of a barrel of oil has dropped from $100 to just $46. Subsequently, the price of gas has slid by more than $1 per gallon since Labor Day 2014.
“It is unbelievable that drivers are ending their summer vacations with the lowest gas prices for this time of year in more than a decade,” Avery Ash, an AAA spokesman, said in a statement.
Here are some reports from the internet of higher prices at some stations in DC for Labor Day or shortly before (check links for source of report)
$3.99
Exxon 339 Pennsylvania Ave SE & 4th St SE
Washington - SE
phatpath
$3.59
Exxon 5030 Connecticut Ave NW & Nebraska Ave
Washington - NW
Carp100
$3.46
Exxon 4861 Massachusetts Ave NW & 49th St NW
Washington - NW
JanickBijoux
$3.39
Exxon 200 Massachusetts Ave NE & 2nd St NE
Washington - NE
gaspayne
$3.29
Exxon 4244 Wisconsin Ave NW & Warren St
Washington - NW
GB_Direct
$3.29
Exxon 1201 Pennsylvania Ave SE & 12th St SE
Washington - SE
GB_Direct
$3.29
Exxon 1601 Wisconsin Ave NW & Q St NW
Washington - NW
janette09015
$3.04
Exxon 3535 Connecticut Ave NW & Porter St
Washington - NW
davez11
The National Association of Convenience Stores advocacy: Oppose Language that Weakens Debit Reforms
From NACS: The 2010 passage of the Durbin Amendment to the Dodd-Frank Ac reformed debit card swipe fees and provided much needed relief for retailers and their customers. On July 23, 2015, the Senate Appropriations Committee passed the FY 2016 Financial Services and General Government Appropriations bill with language that would significantly roll back those very reforms that have helped our industry. In just two minutes, you can send a letter NACS has drafted on your behalf to your Senators urging them to remove this harmful language.
Click below for the NACS letter:
Take Action
From NACS: The 2010 passage of the Durbin Amendment to the Dodd-Frank Ac reformed debit card swipe fees and provided much needed relief for retailers and their customers. On July 23, 2015, the Senate Appropriations Committee passed the FY 2016 Financial Services and General Government Appropriations bill with language that would significantly roll back those very reforms that have helped our industry. In just two minutes, you can send a letter NACS has drafted on your behalf to your Senators urging them to remove this harmful language.
Click below for the NACS letter:
Take Action
July, 2015 press release from Consumer Watchdog
Californians Overcharged $4.5 Billion For Gasoline “Gouging Gap” Since Price Spike Began; Gas Prices Set To Climb Even More.
Contact Info:
jamie@consumerwatchdog.org
Santa Monica, CA— Californian drivers, who have paid an average of 74 cents more per gallon at the pump than drivers nationwide, have shelled out $4.5 billion more for their gasoline than US drivers from February to June, Consumer Watchdog said.
See: http://www.consumerwatchdog.org/newsrelease/californians-overcharged-45-billion-gasoline-%25E2%2580%259Cgouging-gap%25E2%2580%259D-price-spike-began-gas-prices-
Californians Overcharged $4.5 Billion For Gasoline “Gouging Gap” Since Price Spike Began; Gas Prices Set To Climb Even More.
Contact Info:
jamie@consumerwatchdog.org
Santa Monica, CA— Californian drivers, who have paid an average of 74 cents more per gallon at the pump than drivers nationwide, have shelled out $4.5 billion more for their gasoline than US drivers from February to June, Consumer Watchdog said.
See: http://www.consumerwatchdog.org/newsrelease/californians-overcharged-45-billion-gasoline-%25E2%2580%259Cgouging-gap%25E2%2580%259D-price-spike-began-gas-prices-
From NACS: Fact Sheets -- Industry Issues
Credit and Debit Card Fees Are Growing
After a 21.6% increase in convenience store industry card fees in 2010, they jumped 23.3% in 2011 to a record $11 billion. Total credit and debit card fees surpassed overall c-store industry profits for the sixth consecutive year. Credit card fees are the second-largest expense at the store level. Only labor costs are more.
Debit Holds for Fuels Purchases
As gas prices and the use of plastic at the pump have increased, consumers are increasingly concerned about the debit "holds" on their accounts.
Foodservice at Convenience Stores
While convenience stores have offered fresh, prepared foods for years, it is only over the last decade that the trend has accelerated. The result is that convenience stores have continued to evolve from gas stations that happen to sell food to food retailers that happen to sell gas.
See http://www.nacsonline.com/Research/FactSheets/IndustryIssues/Pages/IndustryIssues.aspx
Credit and Debit Card Fees Are Growing
After a 21.6% increase in convenience store industry card fees in 2010, they jumped 23.3% in 2011 to a record $11 billion. Total credit and debit card fees surpassed overall c-store industry profits for the sixth consecutive year. Credit card fees are the second-largest expense at the store level. Only labor costs are more.
Debit Holds for Fuels Purchases
As gas prices and the use of plastic at the pump have increased, consumers are increasingly concerned about the debit "holds" on their accounts.
Foodservice at Convenience Stores
While convenience stores have offered fresh, prepared foods for years, it is only over the last decade that the trend has accelerated. The result is that convenience stores have continued to evolve from gas stations that happen to sell food to food retailers that happen to sell gas.
See http://www.nacsonline.com/Research/FactSheets/IndustryIssues/Pages/IndustryIssues.aspx
Fast Gourmet – Late night munchies By: Megan Crain
Megan Crain says:
After a night of bar hopping on U street in D.C., the munchies are evident. However, instead of going for the usual Jumbo Slice or McDonald’s, try going up the street a little further to the Valero gas station for some epic sweet potato fries and steak sandwich (best I have had outside of Philly I might add).
For the rest of Megan's review, click on the title above
Megan Crain says:
After a night of bar hopping on U street in D.C., the munchies are evident. However, instead of going for the usual Jumbo Slice or McDonald’s, try going up the street a little further to the Valero gas station for some epic sweet potato fries and steak sandwich (best I have had outside of Philly I might add).
For the rest of Megan's review, click on the title above
CA gas station owner charges refiners with overcharging
The owner of a ‘76 gas station has brought a law suit accusing the largest oil refiners of the Pacific coast of working together to disrupt supply by running “suspicious” unscheduled maintenance on its sites and exporting large amounts of gasoline from California, according to the suit.
Gasoline prices have begun to drift lower from their summer highs
with the AAA Fuel Gauge Survey showing the national average price has fallen more than 4 cents a gallon in the last week. Three economic trends could push them even lower in the weeks ahead.All three trends are connected to deflation – an overall trend of falling prices. First, and perhaps most important, is that the price of crude oil has begun to fall again.
with the AAA Fuel Gauge Survey showing the national average price has fallen more than 4 cents a gallon in the last week. Three economic trends could push them even lower in the weeks ahead.All three trends are connected to deflation – an overall trend of falling prices. First, and perhaps most important, is that the price of crude oil has begun to fall again.
Credit and Debit Cards at the Pump
The use of plastic at the pump is incredibly convenient. But that convenience comes at a cost.
In 2003, Americans for the first time made more payments by credit or debit card at stores than they did with cash or checks, according to the American Bankers Association. Over the past decade, the trend has accelerated, especially at the gas pump. Today, 78% of consumers fueling up pay by plastic, according to results from the 2015 NACS Consumer Fuels Survey.
An estimated 40 million Americans fill up every day and 30 million of them pay at the pump. However, the system is not without its problems. Credit card and debit card rates are set in a duopoly, where the two largest card issuing companies (Visa and MasterCard) set rates and write rules for retailers that they can either follow or refuse to accept cards, which is not much of an option in today’s competitive marketplace.
The rules that retailers must adhere to also are incredibly complex, running hundreds of pages long. Rates also vary based on the store and even the customer. The card fees that retailers pay are based on the type of card used (rewards cards cost retailers more to accept), the type of business (larger retailers may get better rates based on volume discounts) and how the card is used (fueling islands tend to have higher rates because it they are considered unattended terminals).
Ultimately, the convenience of paying at the pump comes at a cost — both in terms of higher gas prices and a slew of security-related challenges.
Full article: http://www.nacsonline.com/YourBusiness/FuelsReports/2015/RetailOperations/Pages/Cards-at-the-Pump.aspx
The use of plastic at the pump is incredibly convenient. But that convenience comes at a cost.
In 2003, Americans for the first time made more payments by credit or debit card at stores than they did with cash or checks, according to the American Bankers Association. Over the past decade, the trend has accelerated, especially at the gas pump. Today, 78% of consumers fueling up pay by plastic, according to results from the 2015 NACS Consumer Fuels Survey.
An estimated 40 million Americans fill up every day and 30 million of them pay at the pump. However, the system is not without its problems. Credit card and debit card rates are set in a duopoly, where the two largest card issuing companies (Visa and MasterCard) set rates and write rules for retailers that they can either follow or refuse to accept cards, which is not much of an option in today’s competitive marketplace.
The rules that retailers must adhere to also are incredibly complex, running hundreds of pages long. Rates also vary based on the store and even the customer. The card fees that retailers pay are based on the type of card used (rewards cards cost retailers more to accept), the type of business (larger retailers may get better rates based on volume discounts) and how the card is used (fueling islands tend to have higher rates because it they are considered unattended terminals).
Ultimately, the convenience of paying at the pump comes at a cost — both in terms of higher gas prices and a slew of security-related challenges.
Full article: http://www.nacsonline.com/YourBusiness/FuelsReports/2015/RetailOperations/Pages/Cards-at-the-Pump.aspx
FROM LAW 360: BP Franchisees Say Gas Price Policy Sabotaged Their Stations
A pair of BP West Coast Products LLC gas station franchisees testified in a bellwether trial challenging the petroleum giant’s pricing policy, telling jurors that the outdated policy led to razor-thin profit margins that left them unable to compete with rival gas stations.
The trial sees four current and former owners of Atlantic-Richfield Co.-branded stations alleging that when BP owned the brand, it breached the implied covenant in their franchise agreements by requiring them to purchase more expensive Arco-brand gasoline while selling cheaper gasoline to competitors.
During the second day of the trial in Los Angeles, plaintiff Thomas Kim, who owns an Arco station with his parents in Pomona, Calif., testified under direct examination by David Thomas of Kasowitz Benson Torres & Friedman LLP that BP's pricing policy pushed his margins down as he tried to stay price-competitive with other low-cost gas stations.
See (subscription required) http://www.law360.com/competition/articles/678850?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
A pair of BP West Coast Products LLC gas station franchisees testified in a bellwether trial challenging the petroleum giant’s pricing policy, telling jurors that the outdated policy led to razor-thin profit margins that left them unable to compete with rival gas stations.
The trial sees four current and former owners of Atlantic-Richfield Co.-branded stations alleging that when BP owned the brand, it breached the implied covenant in their franchise agreements by requiring them to purchase more expensive Arco-brand gasoline while selling cheaper gasoline to competitors.
During the second day of the trial in Los Angeles, plaintiff Thomas Kim, who owns an Arco station with his parents in Pomona, Calif., testified under direct examination by David Thomas of Kasowitz Benson Torres & Friedman LLP that BP's pricing policy pushed his margins down as he tried to stay price-competitive with other low-cost gas stations.
See (subscription required) http://www.law360.com/competition/articles/678850?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
Gasoline temperature retail case path to settlement
From Court notice:
https://www.hotfuelsettlements.com/
From Court notice:
- Persons or entities that purchased gasoline or diesel fuel (“Plaintiffs”) on or after January 1, 2001, in the following States and jurisdictions –– Alabama, Arizona, Arkansas, California, Delaware, Florida, Georgia, Indiana, Kansas, Kentucky, Louisiana, Maryland, Mississippi, Missouri, Nevada, New Jersey, New Mexico, North Carolina, Oklahoma, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Utah, Virginia, Washington, D.C., Guam and the U.S. Virgin Islands (the “States at Issue”) – brought lawsuits claiming that selling motor fuel without disclosing or adjusting for the effects of temperature violates consumer protection and other laws. All of the cases relating to the States at Issue and all of the Companies are consolidated in a multidistrict proceeding titled In re: Motor Fuel Temperature Sales Practices Litigation, MDL No. 1840, which is before the United States District Court for the District of Kansas (the “Court”).
- The Plaintiffs have entered into the Settlements with certain defendants in the lawsuits: B-B Oil Company, Inc.; BP Products North America Inc. and BP West Coast Products LLC (together, “BP”); Casey’s General Stores, Inc.; Chevron U.S.A. Inc. (“CUSA”); CITGO Petroleum Corporation; ConocoPhillips Company; Coulson Oil Company, Inc.; Dansk Investment Group, Inc. (f/k/a USA Petroleum Corporation); Diamond State Oil, LLC; ExxonMobil Corporation, Esso Virgin Islands, Inc., and Mobil Oil Guam, Inc. (together, “ExxonMobil”); E-Z Mart Stores, Inc.; Flash Market, Inc.; G&M Oil Company, Inc., and G&M Oil Co., LLC (together, “G&M”); J&P Flash, Inc.; Love’s Travel Stops & Country Stores, Inc.; Magness Oil Company; M. M. Fowler, Inc.; Port Cities Oil, LLC; Sam’s Club; Motiva Enterprises LLC and Equilon Enterprises LLC d/b/a Shell Oil Products US (“Shell”); Sinclair Oil Corporation; Sunoco, Inc. (R&M); Tesoro Refining and Marketing Company, LLC; Thorntons Inc.; United El Segundo, Inc.; Valero Marketing and Supply Company; World Oil Corp.; and W.R. Hess
https://www.hotfuelsettlements.com/
Dickstein, Shapiro write-up of Marathon case
By Doreen L. Manchester and Aaron R. Lancaster
http://www.stateagmonitor.com/2015/05/14/state-ags-in-the-news-181/
By Doreen L. Manchester and Aaron R. Lancaster
- Kentucky AG Jack Conway filed a lawsuit alleging that Marathon Petroleum Co. is using anticompetitive practices to charge higher gasoline prices in Kentucky in violation of the Kentucky Consumer Protection Law, the Sherman Act, and the Clayton Act.
- According to the Complaint, gasoline prices in Louisville and Northern Kentucky, in particular, are significantly higher than comparable markets. The lawsuit alleges that Marathon has a dominant position through ownership of refineries that provide 90 to 95 percent of gasoline to the affected markets.
- AG Conway alleges that Marathon is abusing its dominant position by engaging in certain practices, including:
- entering supply agreements which require independent gas retailers to buy all of their fuel from Marathon;
- demanding other refiners sign “exchange agreements” allegedly designed to keep out competing gasoline products; and
- using deed restrictions to prohibit independent gasoline retailers from using their property as a gas station for 25 years unless it sold only Marathon gas.
- Marathon responded that it “disputes the allegations” and “will defend this judicial action vigorously in court.” Marathon also indicated that “the FTC has looked at [the issue] before and reviewed it in a couple of different requests.”
http://www.stateagmonitor.com/2015/05/14/state-ags-in-the-news-181/
Kentucky Attorney General files suit against Marathon Petroleum
From Reuters: Kentucky Attorney General Jack Conway, a Democrat first elected in 2007, filed a lawsuit against Marathon Petroleum Corp in federal courtay.
* Suit alleges Marathon violated state and federal antitrust laws by abusing the monopoly created when Marathon and Ashland Oil merged in 1998. Marathon runs only refinery in Kentucky.
* Suit alleges that Marathon discourages competition by requiring independent retailers to sign unlawful supply agreements that eliminate wholesale competition, by forming exchange agreements with horizontal competitors that keep other suppliers from entering the Kentucky market.
* Suit alleges the company reduces competition by adding deed restrictions to some of the property parcels it sells. The restrictions prohibit the purchaser of the property from selling gas or operating a convenience store.
SOURCE: Kentucky Attorney General's Office here {55F72683-6DC6-4889-9E78-9C50E4C6100F}&activity
From Reuters: Kentucky Attorney General Jack Conway, a Democrat first elected in 2007, filed a lawsuit against Marathon Petroleum Corp in federal courtay.
* Suit alleges Marathon violated state and federal antitrust laws by abusing the monopoly created when Marathon and Ashland Oil merged in 1998. Marathon runs only refinery in Kentucky.
* Suit alleges that Marathon discourages competition by requiring independent retailers to sign unlawful supply agreements that eliminate wholesale competition, by forming exchange agreements with horizontal competitors that keep other suppliers from entering the Kentucky market.
* Suit alleges the company reduces competition by adding deed restrictions to some of the property parcels it sells. The restrictions prohibit the purchaser of the property from selling gas or operating a convenience store.
SOURCE: Kentucky Attorney General's Office here {55F72683-6DC6-4889-9E78-9C50E4C6100F}&activity
DC Attorney General action against local gasoline distributors: Court of Appeals status report notes that settlement discussions are ongoing
for full order:
https://www.scribd.com/doc/265078480/May-4-2015-Status-Report-of-DC-Court-of-Appeals-on-DC-AG-action-against-gasoline-distributors
for full order:
https://www.scribd.com/doc/265078480/May-4-2015-Status-Report-of-DC-Court-of-Appeals-on-DC-AG-action-against-gasoline-distributors
Hearing Examiner recommends DENIAL of Costco gas station in Westfield Wheaton Mall
In December the Montgomery County Office of Zoning and Administrative Hearings recommended DENIAL of the Costco gas station in Westfield Wheaton Mall. The memo is available here: S-2863,_Costco_Formal_Report_Notification_Memo.
The Washington Post article is at http://www.washingtonpost.com/local/md-politics/opponents-win-latest-round-in-marathon-fight-over-costco-gas-station-in-wheaton/2014/12/16/76bd2bea-8540-11e4-a702-fa31ff4ae98e_story.html
In December the Montgomery County Office of Zoning and Administrative Hearings recommended DENIAL of the Costco gas station in Westfield Wheaton Mall. The memo is available here: S-2863,_Costco_Formal_Report_Notification_Memo.
The Washington Post article is at http://www.washingtonpost.com/local/md-politics/opponents-win-latest-round-in-marathon-fight-over-costco-gas-station-in-wheaton/2014/12/16/76bd2bea-8540-11e4-a702-fa31ff4ae98e_story.html
Video on price effects of OPEC decision not to cut output
Among other things, lower prices undercut incentives for US producers to expand shale oil extraction.
http://www.theglobeandmail.com/report-on-business/video/video-opec-oil-prices-slide-further/article21810464/
Among other things, lower prices undercut incentives for US producers to expand shale oil extraction.
http://www.theglobeandmail.com/report-on-business/video/video-opec-oil-prices-slide-further/article21810464/
The NACS 2014 report on gasoline pricing
This valuable resource is at http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2014/Documents/2014NACSFuelsReport_full.pdf
The report points out, among many other things, that branded retailers often pay a premium for fuel in exchange for marketing support, imaging and other benefits. Branded retailers typically have the least choice in how they obtain fuel, or at what price.
This valuable resource is at http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2014/Documents/2014NACSFuelsReport_full.pdf
The report points out, among many other things, that branded retailers often pay a premium for fuel in exchange for marketing support, imaging and other benefits. Branded retailers typically have the least choice in how they obtain fuel, or at what price.
Report on the recent DC Attorney General candidates’ forum
For consumer advocates, the take-away from the recent DC Attorney General candidates’ forum at UDC’s law school on October 23rd was not encouraging, in this writer’s view. (I encourage expression of other views.) For starters, moderator Mike DeBonis did not give consumer issues high priority, although in fairness he did an excellent job raising an array of important issues. He may be correct in feeling that consumer issues are not primary AG candidate issues, however strongly we feel as consumer advocates.
The question of gasoline pricing and local distributor market power did not come up until nearly the end of the program, when it was presented by moderator DeBonis as a question from the audience.
Candidate Paul Zuckerberg argued vehemently, and in agreement with the Washington Post editorial board, that the recent DC AG action against Exxon and local wholesalers was meritless and a waste of government assets. He said (arguably incorrectly) that a court threw out the case on the merits. The remaining candidates at the forum said nothing on the topic. Those candidates are Lorie Masters, Karl Racine, Edward Smith, and Lateefah Williams.
No direct question was posed about the need for additional AG resources and people to pursue affirmative consumer, antitrust, or fraud cases, but candidate Lorie Masters volunteered that she would like the AG to be able to retain outside counsel to pursue affirmative cases, which some might say assumes a lack of ability of attorneys employed by the AG to pursue such cases.
The main part of the discussion jncluded a focus on ethics and government procurement issues. Karl Racine was questioned by other candidates on possible conflicts of interest and particular dealings related to his law firm’s representation of companies that do business with the District. Paul Zuckerman argued that he would represent “your street, not K Street” interests. Latifah Williams emphasized her grass-roots connections to make a similar point.
Posted by Don Allen Resnikoff
Attorney General Candidates Forum
Date & Time: Thursday, October 23, 2014 from 6:30pm to 8:00pm
Location --
University of the District of Columbia
4340 Connecticut Ave NW (Van Ness-UDC Metro)
David A. Clarke School of Law
Washington DC
This is a free event, RSVP to http://www.law.udc.edu/event/AGForum
Seating is limited. The RSVP does not guarantee a seat, but is merely a means for the organizers to know how many guests to expect. (?) Reception to follow.
Journalist Mike DeBonis will moderate the Forum.
Candidates are Lorie Masters, Karl Racine, Edward Smith, Lateefah Williams, and Paul Zuckerberg.
Hopefully the questions will include questions of concern to consumer advocates. A few examples
that have been touched on in this newsletter:
What is your position on the actions the Attorney General’s Office has taken with regard to concentration
of market power in the hands of a few gasoline distributors, which the Attorney General has alleged causes high retail gasoline prices? What other enforcement steps do you think the Attorney General should take?
Do you feel that the Attorney General’s resources for enforcement of consumer and antitrust laws are sufficient? As Attorney General would you advocate for more resources? Do you agree with the D.C. Council’s elimination of dedicated funding for consumer and antitrust law enforcement? The Attorney General reportedly has increased staffing to monitor DC Government procurement. What do you think the Attorney General’s role should be in insuring honest and efficient procurement practices?
Do you support prohibiting compelled arbitration as an alternative to litigation by consumers?
There are other questions, of course.
Posted by DAR
Challenge to E15 standard fails for lack of standing
'
The D.C. Circuit rejected a petition from petroleum and engine manufacturing trade groups to review the U.S. EPA's approval of a gasoline blend with 15 percent ethanol. The Court found that the industry groups failed to show that they suffered any injury from the EPA’s decision to waive a ban on 15 percent ethanol fuel. The D.C. Circuit’s ruling leaves in place the E15 waivers issued by the EPA in 2010 and 2011. The Court wrote:
"But API providesno evidence that any of its members sells or plansto sell E15."
We are not aware of actions by sellers of E15, nor are we clear about whether sellers of E15 suffer injury the Court would recognize.
'
The D.C. Circuit rejected a petition from petroleum and engine manufacturing trade groups to review the U.S. EPA's approval of a gasoline blend with 15 percent ethanol. The Court found that the industry groups failed to show that they suffered any injury from the EPA’s decision to waive a ban on 15 percent ethanol fuel. The D.C. Circuit’s ruling leaves in place the E15 waivers issued by the EPA in 2010 and 2011. The Court wrote:
"But API providesno evidence that any of its members sells or plansto sell E15."
We are not aware of actions by sellers of E15, nor are we clear about whether sellers of E15 suffer injury the Court would recognize.
Bill reintroduced that would prohibit gasoline distributors from operating retail service stations in the District
DC Council Bill B19-299, the Retail Service Station Amendment Act of 2011, would have prohibited gasoline distributors from also operating retail service stations in the District. That bill has been reintroduced. The DC Council Committee Report on the 2011 bill is at http://dcclims1.dccouncil.us/images/00001/20120206123835.pdf The Report relies in substantial part on supporting testimony by the DC Attorney General and antitrust expert David Balto.
DC Council Bill B19-299, the Retail Service Station Amendment Act of 2011, would have prohibited gasoline distributors from also operating retail service stations in the District. That bill has been reintroduced. The DC Council Committee Report on the 2011 bill is at http://dcclims1.dccouncil.us/images/00001/20120206123835.pdf The Report relies in substantial part on supporting testimony by the DC Attorney General and antitrust expert David Balto.
Crude oil prices down
Crude oil prices dropped on both the New York and the London markets on Sept. 22 with Brent crude oil prices for December dropping below $98/bbl. Barclays Inc. analysts issued a weekly market outlook saying they believe the Brent-West Texas Intermediate spread could widen to about $8/bbl during the fourth quarter.
See http://www.ogj.com/articles/2014/09/market-watch-brent-crude-oil-futures-drop-below-98-bbl.html?cmpid=EnlDailySeptember232014
Crude oil prices dropped on both the New York and the London markets on Sept. 22 with Brent crude oil prices for December dropping below $98/bbl. Barclays Inc. analysts issued a weekly market outlook saying they believe the Brent-West Texas Intermediate spread could widen to about $8/bbl during the fourth quarter.
See http://www.ogj.com/articles/2014/09/market-watch-brent-crude-oil-futures-drop-below-98-bbl.html?cmpid=EnlDailySeptember232014
National retail gasoline prices; local D.C. prices
US retail prices for regular gasoline averaged $3.45/gal on Aug. 25, which was lowest price on a Monday preceding the Labor Day holiday in the US since 2010, according to data from the US Energy Information Administration. The average price at the pump is now 25¢/gal lower than it was at the end of June.
But not everywhere:
From Gas Buddy 8/29/2014 at 4 PM
$4.59 Exxon 339 Pennsylvania Ave SE & 4th St SE , D.C.
$4.18 Exxon 200 Massachusetts Ave NE & 2nd St NE, D.C.
$4.10 Exxon 4244 Wisconsin Ave NW & Warren St. NW, D.C.
US retail prices for regular gasoline averaged $3.45/gal on Aug. 25, which was lowest price on a Monday preceding the Labor Day holiday in the US since 2010, according to data from the US Energy Information Administration. The average price at the pump is now 25¢/gal lower than it was at the end of June.
But not everywhere:
From Gas Buddy 8/29/2014 at 4 PM
$4.59 Exxon 339 Pennsylvania Ave SE & 4th St SE , D.C.
$4.18 Exxon 200 Massachusetts Ave NE & 2nd St NE, D.C.
$4.10 Exxon 4244 Wisconsin Ave NW & Warren St. NW, D.C.
Are charges to gasoline station/convenience store owners for credit cards unfairly high?
Here's an an exerpt from an opinion piece we came across that is from last year, but our sense is that the concern has not gone away:
What is especially troublesome to Collins and others is that credit card fees increase when the cost of gasoline rises, yet retailer margins don’t. To illustrate, a typical credit card fee is 2 percent. With gasoline selling at $3 a gallon, the credit card fee would be 6 cents. But at $3.50 a gallon, the credit card fee increases to 7 cents, and the fee would continue to increase with the price of gasoline.
On the other hand, the convenience store’s margin is based on a fixed amount, not a percentage. So if a store operator’s margin is in the 8- to 9-cent-per-gallon range and the credit card fee results in a 7-cents-per-gallon charge, the store’s margin is precariously slim and might even be negative.
Nationally, convenience store credit card fees rose 23 percent to $11.2 billion in 2011, according to the National Association of Convenience Stores.
“There aren’t that many industries that have seen that kind of increase,” Collins says. “When gasoline prices started rising, the credit card fees increased faster. But with us, it doesn’t matter. We make the same per gallon, whether it’s a $40 sale or an $80 sale. You can look at the amount of money the credit card companies are making, and you can trace the increases back to the increase in gas prices.”
From: http://www.businessalabama.com/Business-Alabama/March-2013/Critical-Retail-Savvy/
Here's an an exerpt from an opinion piece we came across that is from last year, but our sense is that the concern has not gone away:
What is especially troublesome to Collins and others is that credit card fees increase when the cost of gasoline rises, yet retailer margins don’t. To illustrate, a typical credit card fee is 2 percent. With gasoline selling at $3 a gallon, the credit card fee would be 6 cents. But at $3.50 a gallon, the credit card fee increases to 7 cents, and the fee would continue to increase with the price of gasoline.
On the other hand, the convenience store’s margin is based on a fixed amount, not a percentage. So if a store operator’s margin is in the 8- to 9-cent-per-gallon range and the credit card fee results in a 7-cents-per-gallon charge, the store’s margin is precariously slim and might even be negative.
Nationally, convenience store credit card fees rose 23 percent to $11.2 billion in 2011, according to the National Association of Convenience Stores.
“There aren’t that many industries that have seen that kind of increase,” Collins says. “When gasoline prices started rising, the credit card fees increased faster. But with us, it doesn’t matter. We make the same per gallon, whether it’s a $40 sale or an $80 sale. You can look at the amount of money the credit card companies are making, and you can trace the increases back to the increase in gas prices.”
From: http://www.businessalabama.com/Business-Alabama/March-2013/Critical-Retail-Savvy/
From Law 360 -Gas Station Seller Pays $3M To Settle Environmental Law Fine-Ducking Suit
By Matt Chiappardi
Law360, Wilmington (August 21, 2014, 7:54 PM ET) -- The former owner of a regional gas station chain in Delaware and Maryland has paid the federal government nearly $3 million to settle claims that he moved assets to avoid paying $2 million in environmental fines connected to underground storage tanks, the U.S. Environmental Protection Agency said Thursday.
Robert M. Duncan, who once owned Duncan Petroleum Corp. before selling in 2007, on Aug. 6 paid a $2 million fine levied in 2010, plus nearly $900,000 in interest, penalties and court costs, ending what the EPA said was a decade of administrative and judicial proceedings by it and the U.S. Department of Justice, according to the agency.
By Matt Chiappardi
Law360, Wilmington (August 21, 2014, 7:54 PM ET) -- The former owner of a regional gas station chain in Delaware and Maryland has paid the federal government nearly $3 million to settle claims that he moved assets to avoid paying $2 million in environmental fines connected to underground storage tanks, the U.S. Environmental Protection Agency said Thursday.
Robert M. Duncan, who once owned Duncan Petroleum Corp. before selling in 2007, on Aug. 6 paid a $2 million fine levied in 2010, plus nearly $900,000 in interest, penalties and court costs, ending what the EPA said was a decade of administrative and judicial proceedings by it and the U.S. Department of Justice, according to the agency.
DC's disappearing gas stations
The Post news article appeared more than a year ago, but the trend it reported continues. Do you have a disappearing gas station story you can share? We'd like to know what happened, and share your story if you are comfortable with sharing. Let us know. Send an email to donresnikoff@donresnikofflaw.com If you prefer you can call and speak with Don Resnikoff at 202-344-0089.
Excerpts of the Post article follow:
Along busy Wisconsin Avenue, two Exxons and a BP have stopped selling gas or have closed completely, making way for a high-rise apartment building and a new bank. A Sunoco, the area’s last Wisconsin Avenue station, is being sold to a developer with plans for a six-floor office building.
The dwindling number of stations reflects a transformation underway in some of Washington’s innersuburbs as they continue to evolve from car-centric sprawl into more densely developed hubs built around walking, cycling and public transit. It also underscores recent changes in the gas station industry that have made it more difficult for stations on smaller parcels to make money, leaving owners more eager to sell.
“In Georgetown, we have three gas stations,” said Anthony M. Lanier, president of the development company, EastBanc. “I think every one of those will be built on in the foreseeable future because of land values.”
Industry experts say more recent changes in the retail gas business have added to station owners’ willingness to sell.
As wholesale fuel prices have risen, station owners have cut their own gas profit margins to keep customers, industry experts said. That has left them relying more on revenue from convenience stores, carwashes and repair bays — moneymakers that stations on smaller parcels in cities and inner suburbs often can’t accommodate.
George Kavadoy said rising costs for taxes, labor and environmental compliance took a toll on his BP station, which he had owned at Wisconsin and Highland Avenue for 21 years, some of that time as an Amoco. Meanwhile, he said, gas sales dropped while his land value skyrocketed. Property tax records for 2012 listed the assessed value of the gas station property at $2.2 million, up from $582,000 in 1999.
The station closed in August, and Kavadoy said he recently signed a 20-year lease with TD Bank to build on the site.
“It’s hard to give up a business after 21 years — my mechanics and the community were all like a family — but when the company is losing money, it’s a no-brainer,” Kavadoy said.
Don Fogel, 68, said his Sunoco on Wisconsin at Battery [Bethesda] would have folded years ago if not for its convenience store, carwash and auto repair shop. When Donohoe Development Co. approached him through a broker six years ago, Fogel said he realized that he could make enough off the sale to retire.
Donohoe is set to buy the land for a six-story office building, Fogel and a Donohoe official said. Once the Sunoco closes, there will be no gas pumps on Bethesda’s stretch of Wisconsin.
“We’re well aware of that,” Fogel said, “but you can’t stay open just because people want you to be convenient to them.”
http://www.washingtonpost.com/local/trafficandcommuting/gas-stations-are-vanishing-from-washingtons-inner-suburbs/2013/04/28/bff34762-9bb9-11e2-9a79-eb5280c81c63_story.html
The Post news article appeared more than a year ago, but the trend it reported continues. Do you have a disappearing gas station story you can share? We'd like to know what happened, and share your story if you are comfortable with sharing. Let us know. Send an email to donresnikoff@donresnikofflaw.com If you prefer you can call and speak with Don Resnikoff at 202-344-0089.
Excerpts of the Post article follow:
Along busy Wisconsin Avenue, two Exxons and a BP have stopped selling gas or have closed completely, making way for a high-rise apartment building and a new bank. A Sunoco, the area’s last Wisconsin Avenue station, is being sold to a developer with plans for a six-floor office building.
The dwindling number of stations reflects a transformation underway in some of Washington’s innersuburbs as they continue to evolve from car-centric sprawl into more densely developed hubs built around walking, cycling and public transit. It also underscores recent changes in the gas station industry that have made it more difficult for stations on smaller parcels to make money, leaving owners more eager to sell.
“In Georgetown, we have three gas stations,” said Anthony M. Lanier, president of the development company, EastBanc. “I think every one of those will be built on in the foreseeable future because of land values.”
Industry experts say more recent changes in the retail gas business have added to station owners’ willingness to sell.
As wholesale fuel prices have risen, station owners have cut their own gas profit margins to keep customers, industry experts said. That has left them relying more on revenue from convenience stores, carwashes and repair bays — moneymakers that stations on smaller parcels in cities and inner suburbs often can’t accommodate.
George Kavadoy said rising costs for taxes, labor and environmental compliance took a toll on his BP station, which he had owned at Wisconsin and Highland Avenue for 21 years, some of that time as an Amoco. Meanwhile, he said, gas sales dropped while his land value skyrocketed. Property tax records for 2012 listed the assessed value of the gas station property at $2.2 million, up from $582,000 in 1999.
The station closed in August, and Kavadoy said he recently signed a 20-year lease with TD Bank to build on the site.
“It’s hard to give up a business after 21 years — my mechanics and the community were all like a family — but when the company is losing money, it’s a no-brainer,” Kavadoy said.
Don Fogel, 68, said his Sunoco on Wisconsin at Battery [Bethesda] would have folded years ago if not for its convenience store, carwash and auto repair shop. When Donohoe Development Co. approached him through a broker six years ago, Fogel said he realized that he could make enough off the sale to retire.
Donohoe is set to buy the land for a six-story office building, Fogel and a Donohoe official said. Once the Sunoco closes, there will be no gas pumps on Bethesda’s stretch of Wisconsin.
“We’re well aware of that,” Fogel said, “but you can’t stay open just because people want you to be convenient to them.”
http://www.washingtonpost.com/local/trafficandcommuting/gas-stations-are-vanishing-from-washingtons-inner-suburbs/2013/04/28/bff34762-9bb9-11e2-9a79-eb5280c81c63_story.html
Ayub Mamo in 2011:
“We are really a real estate company,” he says. “We’re in it for the real estate.” Mamo considers the coming transition inevitable, given the high cost of D.C. real estate and predictions about “peak oil,” alternative fuels, and electric cars that might eventually make gas stations obsolete. “Long term, the real estate is where the value is,” he says.
from: http://www.washingtoncitypaper.com/articles/40430/joe-mamo-dc-gas-station-master/full/
Gas station at 3540 14th St NW Washington, DC before and after:
“We are really a real estate company,” he says. “We’re in it for the real estate.” Mamo considers the coming transition inevitable, given the high cost of D.C. real estate and predictions about “peak oil,” alternative fuels, and electric cars that might eventually make gas stations obsolete. “Long term, the real estate is where the value is,” he says.
from: http://www.washingtoncitypaper.com/articles/40430/joe-mamo-dc-gas-station-master/full/
Gas station at 3540 14th St NW Washington, DC before and after:
Georgetown, D.C. gas station near Key bridge, before and after
CNN: Gas prices by state
Drivers are paying about 3% more for a gallon of gas now versus last year. Residents in Hawaii pay the most.
For the complete listing of prices by state with a click-on map (but can you find D.C.?) see http://money.cnn.com/news/storysupplement/economy/gas_prices_by_state/
Drivers are paying about 3% more for a gallon of gas now versus last year. Residents in Hawaii pay the most.
For the complete listing of prices by state with a click-on map (but can you find D.C.?) see http://money.cnn.com/news/storysupplement/economy/gas_prices_by_state/
Gas buyers fume at credit, debit card limits, 'blocks.'
Retailers are unhappy too
Consumers already frustrated by the high price of gas may also be hit with a couple of nasty surprises at the pump: Their credit cards may turn stingy, imposing limits that leave unfilled tanks, or they may get greedy, "blocking off" more of your credit or debit card limit than needed for a fill-up.
Jeff Lenard, spokesman for the National Association of Convenience Stores, sympathizes. Of the group's 145,000 stores, 80 percent sell gas. "Consumers are already pretty ticked off" over gas prices, he says. "Then they get hit with one or both of these things."
Retailers have limited control over these credit card practices, and have complaints of their own.
The article is by By Emily Starbuck Gerson and Carol Vinzant
Read more: http://www.creditcards.com/credit-card-news/buyers-fume-at-gas-credit-cards-1267.php#ixzz35eN3hzZP
Retailers are unhappy too
Consumers already frustrated by the high price of gas may also be hit with a couple of nasty surprises at the pump: Their credit cards may turn stingy, imposing limits that leave unfilled tanks, or they may get greedy, "blocking off" more of your credit or debit card limit than needed for a fill-up.
Jeff Lenard, spokesman for the National Association of Convenience Stores, sympathizes. Of the group's 145,000 stores, 80 percent sell gas. "Consumers are already pretty ticked off" over gas prices, he says. "Then they get hit with one or both of these things."
Retailers have limited control over these credit card practices, and have complaints of their own.
The article is by By Emily Starbuck Gerson and Carol Vinzant
Read more: http://www.creditcards.com/credit-card-news/buyers-fume-at-gas-credit-cards-1267.php#ixzz35eN3hzZP
E&Y: US oil, gas companies’ reserves, profits up in 2013
HOUSTON, June 24 06/24/2014 By OGJ editors
A slight decrease in capital spending by US oil and gas companies in 2013 gave way to a 9% increase in oil and gas reserves, strong oil prices, and improving natural gas prices, Ernst & Young reported on June 24 in its annual US oil and gas reserves study.
* * *
A 53% increase in after-tax profits to $33.4 billion for the study companies in 2013 was facilitated by an 11% increase in revenues and significant decrease in property impairments, E&Y says. In 2012, study companies reported a 58% decrease in after-tax profits, which E&Y attributed to low natural gas prices (OGJ Online, June 4, 2013).
Revenues reached $199 billion in 2013 as oil production and oil prices increased. Production costs for the year increased mainly because of higher lease operating expenses, and many companies made strong investments in their 2013 operations with a plowback percentage of 125%, E&Y says.
Year end oil reserves reached 25.4 billion bbl in 2013.
"Large independents accounted for the largest absolute increases in oil and gas reserves in 2013, though the gas reserves still remain below the level we saw in 2011," Byers said.
The US oil and gas reserves study is a compilation and analysis of certain oil and gas reserve disclosure information reported to the Securities and Exchange Commission.
See for the full story: http://www.ogj.com/articles/2014/06/e-y-us-oil-gas-companies-reserves-profits-up-in-2013.html?cmpid=EnlDailyJune242014
HOUSTON, June 24 06/24/2014 By OGJ editors
A slight decrease in capital spending by US oil and gas companies in 2013 gave way to a 9% increase in oil and gas reserves, strong oil prices, and improving natural gas prices, Ernst & Young reported on June 24 in its annual US oil and gas reserves study.
* * *
A 53% increase in after-tax profits to $33.4 billion for the study companies in 2013 was facilitated by an 11% increase in revenues and significant decrease in property impairments, E&Y says. In 2012, study companies reported a 58% decrease in after-tax profits, which E&Y attributed to low natural gas prices (OGJ Online, June 4, 2013).
Revenues reached $199 billion in 2013 as oil production and oil prices increased. Production costs for the year increased mainly because of higher lease operating expenses, and many companies made strong investments in their 2013 operations with a plowback percentage of 125%, E&Y says.
Year end oil reserves reached 25.4 billion bbl in 2013.
"Large independents accounted for the largest absolute increases in oil and gas reserves in 2013, though the gas reserves still remain below the level we saw in 2011," Byers said.
The US oil and gas reserves study is a compilation and analysis of certain oil and gas reserve disclosure information reported to the Securities and Exchange Commission.
See for the full story: http://www.ogj.com/articles/2014/06/e-y-us-oil-gas-companies-reserves-profits-up-in-2013.html?cmpid=EnlDailyJune242014
Liberty gas is OK
Business Insider reports that there is little reason for avoiding "off-brand" gas stations (like Liberty in Maryland) because of fear of what their cheaper product might do to a car. The only difference between the products is that name-brand stations like Mobil and Shell may put extra engine-cleaning additives in theirs.
“While it may seem generic gas is too good to be true and not the best option for your vehicle, unbranded fuel should not damage an engine," AAA said in an email to a Business Insider reporter.
"Even 'unbranded' fuel is required to meet legal requirements for RVP, ethanol percentage, octane, detergent content and more. In many cases, the local unbranded gasoline is actually supplied by a major oil company, but simply not sold under their name.”
In 2007, ABC News ran a test to find differences between gasoline from Mobil (name-brand) and Liberty (generic). Bob Crawford at the Maryland Fuel Testing Laboratory told them, "By and large, it's one and the same...You will find results that almost mirror one another."
He added, "There are going to be slight variations — but gasoline is gasoline," and generic fuel "will do no harm at all" to a car.
In 2012, the fuels market manager for Shell told Edmunds, "We really believe that are differences in fuels. We can see it, feel it and measure it."
But Consumer Reports comes down on the side of generic gas. In a post on common fuel economy myths, it debunks the idea that "no-name gas stations offer lower-quality fuel."
Read more: http://www.businessinsider.com/no-reason-not-to-use-cheap-off-brand-gas-2013-8#ixzz35Z9g1Dnh
Business Insider reports that there is little reason for avoiding "off-brand" gas stations (like Liberty in Maryland) because of fear of what their cheaper product might do to a car. The only difference between the products is that name-brand stations like Mobil and Shell may put extra engine-cleaning additives in theirs.
“While it may seem generic gas is too good to be true and not the best option for your vehicle, unbranded fuel should not damage an engine," AAA said in an email to a Business Insider reporter.
"Even 'unbranded' fuel is required to meet legal requirements for RVP, ethanol percentage, octane, detergent content and more. In many cases, the local unbranded gasoline is actually supplied by a major oil company, but simply not sold under their name.”
In 2007, ABC News ran a test to find differences between gasoline from Mobil (name-brand) and Liberty (generic). Bob Crawford at the Maryland Fuel Testing Laboratory told them, "By and large, it's one and the same...You will find results that almost mirror one another."
He added, "There are going to be slight variations — but gasoline is gasoline," and generic fuel "will do no harm at all" to a car.
In 2012, the fuels market manager for Shell told Edmunds, "We really believe that are differences in fuels. We can see it, feel it and measure it."
But Consumer Reports comes down on the side of generic gas. In a post on common fuel economy myths, it debunks the idea that "no-name gas stations offer lower-quality fuel."
Read more: http://www.businessinsider.com/no-reason-not-to-use-cheap-off-brand-gas-2013-8#ixzz35Z9g1Dnh
The law in New York allows retailers to sell cheaper unbranded gasoline,
Owners of stations affiliated with major oil companies such as ExxonMobil, Hess and Sunoco are typically required under contract to buy gas made by those companies. But New York statute law allows such gas stations that own their own tanks and pumps to get around those clauses, ultimately providing them with the ability to buy cheaper unbranded gas at a significant discount.
N.Y. GBS. LAW § 199-j : NY Code - Section 199-J: Dealer's right to deal with suppliers other than his distributor - Any provision of a franchise with a refiner which prohibits a dealer, who either directly or through an affiliate owns a service station including the tanks and pumps and who dedicates a tank for sale of unbranded motor fuel, or a distributor from purchasing or selling unbranded motor fuel from a person or firm other than the refiner or limits the quantity of such unbranded motor fuel to be purchased from another person or firm or any provision of a franchise which directly or indirectly discourages a dealer or distributor from purchasing or selling such unbranded motor fuels from another person or firm, shall be null and void. - See more at: http://codes.lp.findlaw.com/nycode/GBS/11-B/199-j#sthash.YlRDBDP1.dpuf
A federal judge has rejected a $23 million deal to cover Citgo liability in a proposed settlement over methyl tertiary-butyl ether groundwater contamination
U.S. District Judge Shira A. Scheindlin denied the New Jersey Department of Environmental Protection’s motion for approval of a judicial consent order that listed the terms of the agency’s settlement with Citgo. The judge said that the amoubt calculated by the plaintiffs didn’t account for Citgo’s portion of liability, and that the DEP's calculation wasn’t properly supported by evidence..
“Plaintiffs offer no explanation for these inconsistencies, which raise doubts about the reliability of the entire list,” Judge Scheindlin wrote. “With such an incomplete record, it is impossible for me to determine whether the settlement is reasonable and fair.”
The suit is part of a larger multidistrict litigation over the groundwater contamination.
The contamination involves MTBE, used in U.S. gasoline in the late 1970s and later as an octane enhancer. It is known to be carcinogenic to animals.
See http://www.scribd.com/doc/229351721/Federal-judge-rejects-23-million-settlement-re-Citgo-methyl-tertiary-butyl-ether-groundwater-contamination-d-refineries-in-New-Jersey
U.S. District Judge Shira A. Scheindlin denied the New Jersey Department of Environmental Protection’s motion for approval of a judicial consent order that listed the terms of the agency’s settlement with Citgo. The judge said that the amoubt calculated by the plaintiffs didn’t account for Citgo’s portion of liability, and that the DEP's calculation wasn’t properly supported by evidence..
“Plaintiffs offer no explanation for these inconsistencies, which raise doubts about the reliability of the entire list,” Judge Scheindlin wrote. “With such an incomplete record, it is impossible for me to determine whether the settlement is reasonable and fair.”
The suit is part of a larger multidistrict litigation over the groundwater contamination.
The contamination involves MTBE, used in U.S. gasoline in the late 1970s and later as an octane enhancer. It is known to be carcinogenic to animals.
See http://www.scribd.com/doc/229351721/Federal-judge-rejects-23-million-settlement-re-Citgo-methyl-tertiary-butyl-ether-groundwater-contamination-d-refineries-in-New-Jersey
Zone pricing in California
Known in the industry as zone pricing, the controversial practice was apparent one afternoon when Culver City resident Michael Denis, on a jaunt to downtown Los Angeles, stopped at a Chevron station to feed his Fiat 500 some gasoline at $4.69 a gallon.
About four miles away, Lupe Alfaro was filling her Toyota Camry with Chevron gasoline but was paying $3.89 a gallon.
The two motorists were buying the same grade of gasoline, which more than likely came from the same refinery in El Segundo. Yet the prices they paid differed by 80 cents a gallon, or by more than $10 to fill an average 13-gallon tank.
"Hey, I'm trying to have a fun day here," Denis mock-groused when told about the savings that Alfaro enjoyed.
Denis' and Alfaro's different price experiences came about because fuel refiners [or wholesalers - DR] charge unequal amounts to service station dealers in separate areas based on a host of closely guarded factors, such as nearby competition, traffic volume and station amenities.
Such price strategies aren't common in other retail businesses. When buying a sweater from a department store, for instance, a shopper can expect to pay the same price at the chain's other stores in a region.
In fuel retailing, however, "location can affect prices," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. "If you have few competitors and are near an airport or a rail terminal, you can price more aggressively."
From article by Ronald White in 2013 at http://articles.latimes.com/2013/jan/01/business/la-fi-zone-pricing-20130102
Known in the industry as zone pricing, the controversial practice was apparent one afternoon when Culver City resident Michael Denis, on a jaunt to downtown Los Angeles, stopped at a Chevron station to feed his Fiat 500 some gasoline at $4.69 a gallon.
About four miles away, Lupe Alfaro was filling her Toyota Camry with Chevron gasoline but was paying $3.89 a gallon.
The two motorists were buying the same grade of gasoline, which more than likely came from the same refinery in El Segundo. Yet the prices they paid differed by 80 cents a gallon, or by more than $10 to fill an average 13-gallon tank.
"Hey, I'm trying to have a fun day here," Denis mock-groused when told about the savings that Alfaro enjoyed.
Denis' and Alfaro's different price experiences came about because fuel refiners [or wholesalers - DR] charge unequal amounts to service station dealers in separate areas based on a host of closely guarded factors, such as nearby competition, traffic volume and station amenities.
Such price strategies aren't common in other retail businesses. When buying a sweater from a department store, for instance, a shopper can expect to pay the same price at the chain's other stores in a region.
In fuel retailing, however, "location can affect prices," said Tom Kloza, chief oil analyst for the Oil Price Information Service in New Jersey. "If you have few competitors and are near an airport or a rail terminal, you can price more aggressively."
From article by Ronald White in 2013 at http://articles.latimes.com/2013/jan/01/business/la-fi-zone-pricing-20130102
Gas prices in DC zip code 20016
If you live in zip code 20016 in the Northwest part of the District of Columbia you have an income higher than the national average, and you also have local gas stations that charge above the national average, and more than gas stations in other neighborhhoods.
Gaspricewatch.com for 6/10/2014 (look here) reports:
The Exxon station at 4244 Wisconsin Ave NW @Warren St NW, Washington, DC 20016 was recently charging $4.03 a gallon for regular.
The Shell station at 4900 Wisconsin Ave NW @Ellicott St., Washington, DC 20016 was recently charging $4.05 a gallon for regular.
The Exxon station at 4861 Massachusetts Ave NW @Warren St/49th St., NW, Washington, DC 20016 was recently charging $4.14 a gallon for regular.
But since you will be in a car when you buy gas you might save money by traveling to another neighborhood.
The price of regular gas at the W Express station at 1800 18th St., NW S St NW, Washington, DC zip 20009 was recently $3.33 a gallon for regular.
If you live in zip code 20016 in the Northwest part of the District of Columbia you have an income higher than the national average, and you also have local gas stations that charge above the national average, and more than gas stations in other neighborhhoods.
Gaspricewatch.com for 6/10/2014 (look here) reports:
The Exxon station at 4244 Wisconsin Ave NW @Warren St NW, Washington, DC 20016 was recently charging $4.03 a gallon for regular.
The Shell station at 4900 Wisconsin Ave NW @Ellicott St., Washington, DC 20016 was recently charging $4.05 a gallon for regular.
The Exxon station at 4861 Massachusetts Ave NW @Warren St/49th St., NW, Washington, DC 20016 was recently charging $4.14 a gallon for regular.
But since you will be in a car when you buy gas you might save money by traveling to another neighborhood.
The price of regular gas at the W Express station at 1800 18th St., NW S St NW, Washington, DC zip 20009 was recently $3.33 a gallon for regular.
Legislation to give DC AG authority to sue about gas prices appears to move from fast track to slow to stop
In our recent blog, Tracy Rezvani and I said that the DC Council should vest authority in the DC Mayor and AG to bring an action about gasoline prices under the relevant subchapter of the RSSA. We also said that Council member Mary Cheh's office reported that she is introducing emergency legislation titled the Retail Service Station Emergency Amendment Act of 2014 that will provide the authority. It seems that hasn't happened, and that if remedial legislation is proposed it will happen slowly, and not on an emergency basis. Why? Something about politics and the D.C. Council.
Will powerful suppliers lower local gas prices without further government action? That could happen, and might be a smart short term strategy by the suppliers to discourage government action. But structural market issues are long term.
Posted by DR 6-7-2014
In our recent blog, Tracy Rezvani and I said that the DC Council should vest authority in the DC Mayor and AG to bring an action about gasoline prices under the relevant subchapter of the RSSA. We also said that Council member Mary Cheh's office reported that she is introducing emergency legislation titled the Retail Service Station Emergency Amendment Act of 2014 that will provide the authority. It seems that hasn't happened, and that if remedial legislation is proposed it will happen slowly, and not on an emergency basis. Why? Something about politics and the D.C. Council.
Will powerful suppliers lower local gas prices without further government action? That could happen, and might be a smart short term strategy by the suppliers to discourage government action. But structural market issues are long term.
Posted by DR 6-7-2014
DC citizens: do you like the gas prices in your neighborhood?
So how is the combination of gasoline distributor market power and government inaction working out for citizens of DC, say, for example, people who live in NW DC? And, for the gas station retailers locked into the high-priced supply the DC AG alleged in his Complaint filed in Court? Take a look at GasBuddy reports for where the highest prices in DC are found. Let your DC Council representative know your reaction. See http://www.washingtondcgasprices.com/
So how is the combination of gasoline distributor market power and government inaction working out for citizens of DC, say, for example, people who live in NW DC? And, for the gas station retailers locked into the high-priced supply the DC AG alleged in his Complaint filed in Court? Take a look at GasBuddy reports for where the highest prices in DC are found. Let your DC Council representative know your reaction. See http://www.washingtondcgasprices.com/
Court Dismissal Of The D.C. Action Against ExxonMobil And Gasoline Distributors – Further Action Is Needed to Address Allegations of Price-Inflating Anticompetitive Conduct
By: Don Resnikoff and Tracy Rezvani* 6-1-2014
The D.C. Attorney General has alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. The allegations should not now be ignored simply because a trial-level court has decided that the legal complaint brought by the Attorney General against ExxonMobil and local distributors under a special local statute was not authorized under that statute. The D.C. Council could easily fix the statute to provide the needed authority. Alternatively, the Attorney General could, depending on the outcome of a possible appeal of the trial court decision, simply file a new antitrust action.
For the rest of the blog, see http://www.scribd.com/doc/227900127/DC-AG-Actions-on-Gasoline-Price-by-Resnikoff-Rezvani
By: Don Resnikoff and Tracy Rezvani* 6-1-2014
The D.C. Attorney General has alleged that high local D.C. gasoline prices are caused by anticompetitive exclusive dealing restrictions imposed on retailers by dominant distributors. The allegations should not now be ignored simply because a trial-level court has decided that the legal complaint brought by the Attorney General against ExxonMobil and local distributors under a special local statute was not authorized under that statute. The D.C. Council could easily fix the statute to provide the needed authority. Alternatively, the Attorney General could, depending on the outcome of a possible appeal of the trial court decision, simply file a new antitrust action.
For the rest of the blog, see http://www.scribd.com/doc/227900127/DC-AG-Actions-on-Gasoline-Price-by-Resnikoff-Rezvani
The Washington Post opinion on Court dismissal of the DC action
http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html
http://www.washingtonpost.com/opinions/the-districts-crusade-against-gas-station-magnate-joe-mamo-is-running-on-fumes/2014/05/23/962f6b6a-e297-11e3-810f-764fe508b82d_story.html
Court dismisses DC action against ExxonMobil et al. by Order dated 5-6-2014
The DC action against ExxonMobil and local jobbers was dismissed by the Court because of lack of AG standing under the local statute relied on in the Complaint: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)."
For the opinion and order
See http://www.scribd.com/doc/222728637/DC-Exxon-5-6-2014-Order-Granting-MTDs-1
The DC action against ExxonMobil and local jobbers was dismissed by the Court because of lack of AG standing under the local statute relied on in the Complaint: “Until such time as the [DC] Council changes its position, the Court finds that the Attorney General has no standing to bring actions under that Subchapter of III of the RSSA, more specifically, D.C. Code § 36-303.01(a)(6) and (a)(11)."
For the opinion and order
See http://www.scribd.com/doc/222728637/DC-Exxon-5-6-2014-Order-Granting-MTDs-1
Crude oil prices up
Crude oil futures prices climbed on the New York and London markets on May 12 upon concerns that additional Western sanctions against Russia could hinder the volume of Russia’s oil exports. Crude markets have been volatile since Ukraine’s Crimea region annexed to Russia earlier this year.
See http://www.ogj.com/articles/2014/05/market-watch-crude-oil-futures-up-on-russia-ukraine-uncertainty.html?cmpid=EnlDailyMay132014
Crude oil futures prices climbed on the New York and London markets on May 12 upon concerns that additional Western sanctions against Russia could hinder the volume of Russia’s oil exports. Crude markets have been volatile since Ukraine’s Crimea region annexed to Russia earlier this year.
See http://www.ogj.com/articles/2014/05/market-watch-crude-oil-futures-up-on-russia-ukraine-uncertainty.html?cmpid=EnlDailyMay132014
Connecticut unconscionable retail gas pricing law triggered by wholesale price increases
A Connecticut law provides that "No seller during any period of abnormal market disruption or during any period in which an imminent abnormal market disruption is reasonably anticipated shall sell or offer to sell an energy resource for an amount that represents an unconscionably excessive price." An abnormal market condition may be triggered bu a rapid advance in wholesale prices. A period of disruption has now been declared by Connecticut government. See http://www.ct.gov/ag/cwp/view.asp?a=2105&Q=508996 Also, see http://www.cga.ct.gov/2012/ACT/Pa/pdf/2012PA-00004-R00SB-00457-PA.pdf
A Connecticut law provides that "No seller during any period of abnormal market disruption or during any period in which an imminent abnormal market disruption is reasonably anticipated shall sell or offer to sell an energy resource for an amount that represents an unconscionably excessive price." An abnormal market condition may be triggered bu a rapid advance in wholesale prices. A period of disruption has now been declared by Connecticut government. See http://www.ct.gov/ag/cwp/view.asp?a=2105&Q=508996 Also, see http://www.cga.ct.gov/2012/ACT/Pa/pdf/2012PA-00004-R00SB-00457-PA.pdf
Chevron’s Richmond refinery project advances
The city of Richmond, Calif., has released a draft environmental impact report for Chevron Corp.’s $1 billion modernization project at its 257,000-b/d Richmond refinery. The report reflects that the project will not change the basic operation or capacity of the refinery, according to a release from Chevron. The project will give the refinery flexibility to process crude oil blends and gas oils containing higher levels of sulfur while meeting strict environmental regulations, according to Chevron.
“The modernization project is not about refining Canadian tar sands or heavy crude, and it will not allow the refinery to receive crude oil by rail or pipeline,” Chevron added.
The city of Richmond, Calif., has released a draft environmental impact report for Chevron Corp.’s $1 billion modernization project at its 257,000-b/d Richmond refinery. The report reflects that the project will not change the basic operation or capacity of the refinery, according to a release from Chevron. The project will give the refinery flexibility to process crude oil blends and gas oils containing higher levels of sulfur while meeting strict environmental regulations, according to Chevron.
“The modernization project is not about refining Canadian tar sands or heavy crude, and it will not allow the refinery to receive crude oil by rail or pipeline,” Chevron added.
As of 4-19-2014, retail gasoline prices are up
See http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp
See http://fuelgaugereport.aaa.com/?redirectto=http://fuelgaugereport.opisnet.com/index.asp
Union Oil Co. of California and ConocoPhillips Co. have defeated a California developer’s claims that gasoline leaks dirtied the site of a planned assisted-living facility after arguing their position to a jury
A copy of the jury verdict can be found at URL http://www.scribd.com/doc/213306703/Verdict-Form-Filed-3-17-2014
A copy of the jury verdict can be found at URL http://www.scribd.com/doc/213306703/Verdict-Form-Filed-3-17-2014
A retail gasoline joke you may have missed
As John Kingston pointed out in The Barrel ( http://blogs.platts.com/2014/02/21/ewing-oil/ ) a lot of integrated oil companies have split up into separate upstream and downstream companies. Others have sold their downstream businesses piecemeal. At the very least, integrated oil companies like ExxonMobil have cut way back or eliminated company-owned gas stations.
But in case you missed it, the fictional TV oil company briefly opened a retail station in New York, selling gasoline for $1.98 a gallon. The URL of a promotion video appears below. It is all a joke, of course, except as it requires reflection on day-to-day business realities.
See http://www.youtube.com/watch?v=_qhXbNLH1a8
As John Kingston pointed out in The Barrel ( http://blogs.platts.com/2014/02/21/ewing-oil/ ) a lot of integrated oil companies have split up into separate upstream and downstream companies. Others have sold their downstream businesses piecemeal. At the very least, integrated oil companies like ExxonMobil have cut way back or eliminated company-owned gas stations.
But in case you missed it, the fictional TV oil company briefly opened a retail station in New York, selling gasoline for $1.98 a gallon. The URL of a promotion video appears below. It is all a joke, of course, except as it requires reflection on day-to-day business realities.
See http://www.youtube.com/watch?v=_qhXbNLH1a8
Sunoco lists several franchise opportunities in NY, Connecticut
See: https://www.sunocoinc.com/real-estate/franchise-opportunities
See: https://www.sunocoinc.com/real-estate/franchise-opportunities
eEPA finalizes Tier 3 motor fuel, other requirements
The US Environmental Protection Agency issued final Tier 3 emissions control requirements for motor fuels and vehicles to meet by Jan. 1, 2017. The regulations address one major concern from refiners by keeping sulfur limits per gallon at existing levels, EPA Administrator Gina McCarthy said.
The US Environmental Protection Agency issued final Tier 3 emissions control requirements for motor fuels and vehicles to meet by Jan. 1, 2017. The regulations address one major concern from refiners by keeping sulfur limits per gallon at existing levels, EPA Administrator Gina McCarthy said.
Docket Check on DC action against ExxonMobil et at., 4-29-2014
Nothing new. The last DC Superior Court docket entry was 1/16/2014:
Additional eFiling Document to District of Columbia's
Supplemental Memorandum in Support of its Opposition to
Defendants' Motions to Dismiss submitted 01/16/2014 17:51.
Nothing new. The last DC Superior Court docket entry was 1/16/2014:
Additional eFiling Document to District of Columbia's
Supplemental Memorandum in Support of its Opposition to
Defendants' Motions to Dismiss submitted 01/16/2014 17:51.
California has big role as feds role out fuel efficiency standards
The U.S. National Highway Traffic Safety Administration and the Environmental Protection Agency won’t be working alone with it comes to developing new greenhouse emissions standards ordered Tuesday by the Obama Administration.
They will be relying, at least partially, on work already done by California and its Air Resources Board, according to a release form the agency.
California assumed a leadership role in regulating GHG emissions with passage of The Global Warming Solutions Act in 2006 by state lawmakers. In 2011, the federal Phase 1 greenhouse gas standards for heavy-duty vehicles were approved nationally. As part of its climate and air quality improvement programs, California aligned its heavy-duty vehicle requirements with those regulations in 2013.
From an article at http://www.truckinginfo.com/news/story/2014/02/carb-to-work-with-feds-on-new-truck-engine-ghg-standards.aspx
The U.S. National Highway Traffic Safety Administration and the Environmental Protection Agency won’t be working alone with it comes to developing new greenhouse emissions standards ordered Tuesday by the Obama Administration.
They will be relying, at least partially, on work already done by California and its Air Resources Board, according to a release form the agency.
California assumed a leadership role in regulating GHG emissions with passage of The Global Warming Solutions Act in 2006 by state lawmakers. In 2011, the federal Phase 1 greenhouse gas standards for heavy-duty vehicles were approved nationally. As part of its climate and air quality improvement programs, California aligned its heavy-duty vehicle requirements with those regulations in 2013.
From an article at http://www.truckinginfo.com/news/story/2014/02/carb-to-work-with-feds-on-new-truck-engine-ghg-standards.aspx
President lays out details for his plan to improve the fuel efficiency of American trucks
The President has directed the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to set the next round of Fuel Efficiency Standards for medium- and heavy-duty vehicles. The President is directing the EPA and the DOT’s National Highway Traffic Safety Administration (NHTSA) to develop and issue the next phase of medium- and heavy-duty vehicle fuel efficiency and greenhouse gas standards by March 2016. Under this timeline, the agencies are expected to issue a Notice of Proposed Rulemaking (NPRM) by March 2015. This second round of fuel efficiency standards will build on the first-ever standards for medium- and heavy-duty vehicles (model years 2014 through 2018), which were proposed and finalized by this Administration and will save vehicle owners and operators an estimated $50 billion in fuel costs and save a projected 530 million barrels of oil.
See http://www.whitehouse.gov/the-press-office/2014/02/18/fact-sheet-opportunity-all-improving-fuel-efficiency-american-trucks-bol
The President has directed the Environmental Protection Agency (EPA) and the Department of Transportation (DOT) to set the next round of Fuel Efficiency Standards for medium- and heavy-duty vehicles. The President is directing the EPA and the DOT’s National Highway Traffic Safety Administration (NHTSA) to develop and issue the next phase of medium- and heavy-duty vehicle fuel efficiency and greenhouse gas standards by March 2016. Under this timeline, the agencies are expected to issue a Notice of Proposed Rulemaking (NPRM) by March 2015. This second round of fuel efficiency standards will build on the first-ever standards for medium- and heavy-duty vehicles (model years 2014 through 2018), which were proposed and finalized by this Administration and will save vehicle owners and operators an estimated $50 billion in fuel costs and save a projected 530 million barrels of oil.
See http://www.whitehouse.gov/the-press-office/2014/02/18/fact-sheet-opportunity-all-improving-fuel-efficiency-american-trucks-bol
Will tax credit for biodiesal be extended?
U.S. Senators Maria Cantwell, D-Wash., and Chuck Grassley, R-Iowa, have introduced legislation that would reform and extend the $1-per-gallon tax credit for biodiesel producers through 2017, after Congress allowed the tax breaks to lapse at the end of last year.
The tax incentive helps biodiesel compete with petroleum diesel, stimulating production and ultimately lowering costs for consumers, according to the lawmakers and industry advocates.
“Investing in America’s clean energy economy is the smart thing to do for our environment and America’s energy security,” Cantwell said in a press release. “Biodiesel is America’s first advanced biofuel, which can be made from a variety of feedstocks such as cooking grease and soybeans. This legislation gives businesses the certainty they need to invest in biodiesel and the development of affordable, domestic alternatives to fossil fuels.”
Doug Short explains the decline in gasoline use
Doug Short explains that there has been a decline in gasoline consumption since 2008 until recently. The decline is attributable in large part to some powerful secular changes in US demographics and cultural in general:
Doug Short explains that there has been a decline in gasoline consumption since 2008 until recently. The decline is attributable in large part to some powerful secular changes in US demographics and cultural in general:
- We have an aging population leaving the workforce, which we clearly see in the sustained contraction in the employment-population ratio.
- There is growing trend toward a portable workplace and the ability to work from home (I'm a typical example).
- Social media have provided powerful alternatives to face-to-face interaction requiring transportation (Internet apps, games, the ubiquitous cell phone for talk and texting).
- There has been a general trend in young adults to drive less (related to points two and three above). See this PDF report for details.
- The US is experiencing accelerating urban population growth, which reduces the per-capita dependence on gasoline.
Senators question whether oil export proposals will increase domestic gasoline prices
Senator Cantwell has asked EIA whether exports will increase gasoline prices for American consumers.
See the letter asking the questions at http://www.scribd.com/doc/206043068/2014-02-03-Letter-to-Sieminski-on-Crude-Oil-Export
See also articles at http://www.nytimes.com/2013/12/14/business/energy-environment/energy-secretary-voices-concern-over-dated-oil-export-restrictions.html and http://www.nytimes.com/2014/02/13/business/energy-environment/an-oil-industry-awash-in-crude-argues-over-exporting.html?ref=business
Senator Cantwell has asked EIA whether exports will increase gasoline prices for American consumers.
See the letter asking the questions at http://www.scribd.com/doc/206043068/2014-02-03-Letter-to-Sieminski-on-Crude-Oil-Export
See also articles at http://www.nytimes.com/2013/12/14/business/energy-environment/energy-secretary-voices-concern-over-dated-oil-export-restrictions.html and http://www.nytimes.com/2014/02/13/business/energy-environment/an-oil-industry-awash-in-crude-argues-over-exporting.html?ref=business
NACS finds that Price Dominates Gas Purchasing Decisions
Findings from the 2014 NACS Consumer Fuels Report say that the ability to price shop at 45 mph is just one of the reasons that price has emerged as the dominant reason why a consumer selects a location to fill-up. In every consumer study conducted by NACS over the past eight years, price remains top of mind with consumers. That trend continued in 2014, but there are some significant findings in how consumers search out for prices. The trend would seem to be good news for those selling gasoline lacking a big national brand.
See http://www.nacsonline.com/YourBusiness/FuelsReports/GasPrices_2014/Consumer-Research/Pages/Consumer-Research-Price-Still-Dominates-Gas-Purchasing-Decisions.aspx
Yelp! says don't underestimate the quality of gas station eats
Something for station owners and customers to think about: A lot of Yelp reviewers rave about gas station food. One customer's recent rave review of Cuban style gas station food links to an old Washington Post story:
"In the back of a gritty-looking gas station at 14th and W streets NW, unleaded regular goes for $3.94 a gallon and the yellowfin tuna steak — dressed with red onions, raisins and caper mayonnaise and tucked into a warm homemade brioche — will set you back $8.50. Diners enter Fast Gourmet through a squat building that’s just past the petrol pumps and under a Lowest Price gas billboard." (This is from 2011.)
Can a Food Channel TV series on gas station food be far away? (We love Cuban food, by the way.)
See http://www.yelp.com/list/grub-and-a-side-of-gasoline-gaithersburg
Something for station owners and customers to think about: A lot of Yelp reviewers rave about gas station food. One customer's recent rave review of Cuban style gas station food links to an old Washington Post story:
"In the back of a gritty-looking gas station at 14th and W streets NW, unleaded regular goes for $3.94 a gallon and the yellowfin tuna steak — dressed with red onions, raisins and caper mayonnaise and tucked into a warm homemade brioche — will set you back $8.50. Diners enter Fast Gourmet through a squat building that’s just past the petrol pumps and under a Lowest Price gas billboard." (This is from 2011.)
Can a Food Channel TV series on gas station food be far away? (We love Cuban food, by the way.)
See http://www.yelp.com/list/grub-and-a-side-of-gasoline-gaithersburg
Citgo sticks with independent operator strategy
Citgo, a controversial industry player because of its Venezuelan roots, promotes itself to marketers as a champion of the independent gasoline retailer. Its web site says that "As a supplier with a decades-long tradition of 100 percent dedication to the independently owned and operated Marketer and Retailer class of trade, CITGO knows our success is inherently and fundamentally tied to yours."
See http://www.citgo.com/CITGOforYourBusiness/RetailGasoline.jsp
Citgo, a controversial industry player because of its Venezuelan roots, promotes itself to marketers as a champion of the independent gasoline retailer. Its web site says that "As a supplier with a decades-long tradition of 100 percent dedication to the independently owned and operated Marketer and Retailer class of trade, CITGO knows our success is inherently and fundamentally tied to yours."
See http://www.citgo.com/CITGOforYourBusiness/RetailGasoline.jsp
Chevron and Texaco brands seek retail dealers, at least in some states
The general trend may be for large oil companies to put local branded dealers under the control of local wholesalers, and get out of the franchising business, but some large oil companies may have a different idea, at least in some states. Chevron advertises:
"The fuel retailing world is fierce, with rising competition that makes customer loyalty difficult to attain. That's why you need an iconic brand like Texaco, recognized the world over for performance, quality and service. By combining the unsurpassed cleaning power of Texaco with Techron gasoline and more than 100 years of rich brand heritage, Texaco stations stand out from the crowd, helping retailers succeed.
But there's another reason why retail investors choose the Texaco brand. They value Chevron's commitment to delivering customer satisfaction through doing business "The Chevron Way" – with integrity, safety and trust."
Contacts for interested retailers are offered, but only for these states: Alabama, Alaska, Arizona, California, Florida, Georgia, Hawaii, Louisiana, Mississippi, Nevada, New Mexico, Oregon, Texas, Utah, Washington
Why not other states, say Maryland, Pennsylvania, New Jersey, Delaware, or New York. We dunno.
See http://www.texaco.com/station-ownership.aspx
The general trend may be for large oil companies to put local branded dealers under the control of local wholesalers, and get out of the franchising business, but some large oil companies may have a different idea, at least in some states. Chevron advertises:
"The fuel retailing world is fierce, with rising competition that makes customer loyalty difficult to attain. That's why you need an iconic brand like Texaco, recognized the world over for performance, quality and service. By combining the unsurpassed cleaning power of Texaco with Techron gasoline and more than 100 years of rich brand heritage, Texaco stations stand out from the crowd, helping retailers succeed.
But there's another reason why retail investors choose the Texaco brand. They value Chevron's commitment to delivering customer satisfaction through doing business "The Chevron Way" – with integrity, safety and trust."
Contacts for interested retailers are offered, but only for these states: Alabama, Alaska, Arizona, California, Florida, Georgia, Hawaii, Louisiana, Mississippi, Nevada, New Mexico, Oregon, Texas, Utah, Washington
Why not other states, say Maryland, Pennsylvania, New Jersey, Delaware, or New York. We dunno.
See http://www.texaco.com/station-ownership.aspx
Hess will divest retail stations
Hess Corp., filed paperwork earlier in January, 2014 for the spinoff of its gas-stations network. The separation would be tax free and distribute all Hess Retail shares to shareholders in Hess Corp.
Hess Retail is the largest operator of convenience stores along the East Coast, including D.C. and the fifth largest in the U.S. by company-operated sites.
The company previously exited refining. Its remaining business is oil exploration and production. In June of 2013 , Hess began the sale of its oil terminal network.
http://www.crainsnewyork.com/article/20140108/NEWS/140109906/hess-files-spinoff-of-gas-station-network
Hess Corp., filed paperwork earlier in January, 2014 for the spinoff of its gas-stations network. The separation would be tax free and distribute all Hess Retail shares to shareholders in Hess Corp.
Hess Retail is the largest operator of convenience stores along the East Coast, including D.C. and the fifth largest in the U.S. by company-operated sites.
The company previously exited refining. Its remaining business is oil exploration and production. In June of 2013 , Hess began the sale of its oil terminal network.
http://www.crainsnewyork.com/article/20140108/NEWS/140109906/hess-files-spinoff-of-gas-station-network
More refined Canadian oil products will be available in US
Husky Energy will upgrade its Lima, Ohio, refinery, to process an extra 40,000 barrels of heavy crude per day for about $300 million, the Canadian energy company said, "The project is part of Husky's focused integration strategy and supports the company's growing heavy oil business in Western Canada," the company said in a statement. "It is also aligned with Husky's program to enhance its ability to respond more quickly and efficiently to market conditions by increasing feedstock, product and market access flexibility in its refining segment."
Recently, BP also upgraded its Whiting, Ind., refinery.
Husky Energy will upgrade its Lima, Ohio, refinery, to process an extra 40,000 barrels of heavy crude per day for about $300 million, the Canadian energy company said, "The project is part of Husky's focused integration strategy and supports the company's growing heavy oil business in Western Canada," the company said in a statement. "It is also aligned with Husky's program to enhance its ability to respond more quickly and efficiently to market conditions by increasing feedstock, product and market access flexibility in its refining segment."
Recently, BP also upgraded its Whiting, Ind., refinery.
Royal Dutch Shell’s new chief executive said Thursday the company is shelving its Alaska exploration program, at least for this year.
An appeals court ruling that faulted federal regulators’ environmental analysis of Chukchi Sea oil development has created “substantial obstacles” to Shell’s plan to drill exploration wells this year in that remote region off northwestern Alaska, the company said in a statement.
http://www.alaskadispatch.com/article/20140130/shell-cancels-2014-drilling-alaskas-arctic-waters
An appeals court ruling that faulted federal regulators’ environmental analysis of Chukchi Sea oil development has created “substantial obstacles” to Shell’s plan to drill exploration wells this year in that remote region off northwestern Alaska, the company said in a statement.
http://www.alaskadispatch.com/article/20140130/shell-cancels-2014-drilling-alaskas-arctic-waters
Low price Costco gas dispute with local gas distribution hits Vermont
In a dispute similar to the dispute involving Costco gasoline sales in Washington, DC, Costco is fighting to open a low priced gasoline station in Burlington, Vermont. An unusual aspect of the dispute in Burlington is that US Senator Bernie Sanders is interested.
Sanders, who has called for a federal investigation into the high price of gas in the Burlington region, said he plans to stage a “field hearing” of the Senate Energy & Natural Resources Committee in Burlington to take testimony about the local gas-pricing issue.
Costco has threatened legal action in Vermont to force local government to approve a new Costco gasoline station. “We intend to vigorously pursue our rights in court, and we are confident that we eventually will prevail,” Joe Portera, a Costco executive vice president, wrote in a July 16 letter to Sen. Bernie Sanders, I-Vt., that the senator made public this week.
According to data from the nonpartisan Oil Price Information Service released by Sanders, gas distributors in the Burlington metropolitan market have enjoyed the biggest profit margins of any metropolitan market in the Northeast during most of the past three months, even including comparisons with those in Washington, D.C., and New York City.
We wonder whether Washington, DC and New York residents take solace from the report that gas distributors in Burlington make even bigger profits than in their bigger cities.
This report is an excerpt from http://www.burlingtonfreepress.com/article/20120717/NEWS01/307170022/Costco-Gas-dealers-don-t-want-competition
In a dispute similar to the dispute involving Costco gasoline sales in Washington, DC, Costco is fighting to open a low priced gasoline station in Burlington, Vermont. An unusual aspect of the dispute in Burlington is that US Senator Bernie Sanders is interested.
Sanders, who has called for a federal investigation into the high price of gas in the Burlington region, said he plans to stage a “field hearing” of the Senate Energy & Natural Resources Committee in Burlington to take testimony about the local gas-pricing issue.
Costco has threatened legal action in Vermont to force local government to approve a new Costco gasoline station. “We intend to vigorously pursue our rights in court, and we are confident that we eventually will prevail,” Joe Portera, a Costco executive vice president, wrote in a July 16 letter to Sen. Bernie Sanders, I-Vt., that the senator made public this week.
According to data from the nonpartisan Oil Price Information Service released by Sanders, gas distributors in the Burlington metropolitan market have enjoyed the biggest profit margins of any metropolitan market in the Northeast during most of the past three months, even including comparisons with those in Washington, D.C., and New York City.
We wonder whether Washington, DC and New York residents take solace from the report that gas distributors in Burlington make even bigger profits than in their bigger cities.
This report is an excerpt from http://www.burlingtonfreepress.com/article/20120717/NEWS01/307170022/Costco-Gas-dealers-don-t-want-competition
Debate continues over Wheaton MD Costco gas station -- Opposition continues to dispute pollution projections
As of 1-27-2014 the Costco in Wheaton still has no gas station. Press reports (see cite below) explain that It’s been a long road for Costco and local opposition groups in making their cases on whether the county should allow Costco to build a 16-pump gas station in the mega-store’s parking lot. Costco has sought a special exception ruling to build the gas station for the past two years.
The Costco store opened April of 2012 at the Wheaton Westfield Mall, but plans to open a gas station on the site have stalled.
At issue is whether the gas station poses a threat or nuisance to nearby neighborhoods and a special needs school. Opposition groups have been fighting approval, citing noise, traffic and air pollution as primary concerns.
At proceedings before the Office of Zoning and Administrative Hearings, Costco argued for opening the station and opposition groups — the Kensington Heights Civic Association and Stop Costco Gas Coalition — presented their arguments. Opposition groups disputed pollution impact reports previously submitted by Costco, in which they found mathematical errors.
Excerpted from article by Sarah Scully http://www.gazette.net/article/20130925/NEWS/130929530/debate-continues-over-wheaton-costco-gas-station&template=gazette
As of 1-27-2014 the Costco in Wheaton still has no gas station. Press reports (see cite below) explain that It’s been a long road for Costco and local opposition groups in making their cases on whether the county should allow Costco to build a 16-pump gas station in the mega-store’s parking lot. Costco has sought a special exception ruling to build the gas station for the past two years.
The Costco store opened April of 2012 at the Wheaton Westfield Mall, but plans to open a gas station on the site have stalled.
At issue is whether the gas station poses a threat or nuisance to nearby neighborhoods and a special needs school. Opposition groups have been fighting approval, citing noise, traffic and air pollution as primary concerns.
At proceedings before the Office of Zoning and Administrative Hearings, Costco argued for opening the station and opposition groups — the Kensington Heights Civic Association and Stop Costco Gas Coalition — presented their arguments. Opposition groups disputed pollution impact reports previously submitted by Costco, in which they found mathematical errors.
Excerpted from article by Sarah Scully http://www.gazette.net/article/20130925/NEWS/130929530/debate-continues-over-wheaton-costco-gas-station&template=gazette
Exxon Mobil Corp. has asked the U.S. Supreme Court to set aside a $105 million jury verdict for contaminating New York City's groundwater with the gasoline additive methyl tertiary-butyl ether.
See the U.S. Supreme Court Petition at http://www.scribd.com/doc/201155251/2014-01-13-Exxon-Cert-Petition-FINAL
See the U.S. Supreme Court Petition at http://www.scribd.com/doc/201155251/2014-01-13-Exxon-Cert-Petition-FINAL
Developments: DC Action against Exxonmobil and distributors
The Court docket shows the following:
01/16/2014
Additional eFiling: District of Columbia's Supplemental Memorandum in Support of its Opposition to Defendants' Motions to Dismiss submitted 01/16/2014
Attorney: BUSH, NICHOLAS A.
The additional filings are accessible at http://www.scribd.com/doc/202563534/Supplemental-Memorandum-of-Law and http://www.scribd.com/doc/202564179/Supplemental-Memorandum-of-Law-Exhibit-A
The supplemental Memorandum argues that DC is entitled to pursue its action against ExxonMobil and distributors using its parens patriae authority. That is said to be true, notwithstanding that a proposed statute (shown in Ex A) would have provided yet broader litigation authority.
The Court docket shows the following:
01/16/2014
Additional eFiling: District of Columbia's Supplemental Memorandum in Support of its Opposition to Defendants' Motions to Dismiss submitted 01/16/2014
Attorney: BUSH, NICHOLAS A.
The additional filings are accessible at http://www.scribd.com/doc/202563534/Supplemental-Memorandum-of-Law and http://www.scribd.com/doc/202564179/Supplemental-Memorandum-of-Law-Exhibit-A
The supplemental Memorandum argues that DC is entitled to pursue its action against ExxonMobil and distributors using its parens patriae authority. That is said to be true, notwithstanding that a proposed statute (shown in Ex A) would have provided yet broader litigation authority.
US Gas price probe faces data fight
As US authorities investigate global oil price-fixing, a legal fight erupts over disclosure of records.
US authorities are investigating Royal Dutch Shell, Vitol Group and Plains All American Pipeline, as well as Morgan Stanley. The defendants are fighting to prevent US authorities from using documents that relate to oil trading activity.
See http://www.eenews.net/stories/1059993123
As US authorities investigate global oil price-fixing, a legal fight erupts over disclosure of records.
US authorities are investigating Royal Dutch Shell, Vitol Group and Plains All American Pipeline, as well as Morgan Stanley. The defendants are fighting to prevent US authorities from using documents that relate to oil trading activity.
See http://www.eenews.net/stories/1059993123
January 13, 20014 AAA gasoline price report
From http://newsroom.aaa.com/tag/gas-prices/
Prices in some areas have increased due to extremely cold weather causing refinery issues, yet sub-zero temperatures have also decreased demand for gasoline, which could put some downward pressure on prices. Prices in the majority of states (35) and Washington, D.C. are less expensive than one week ago; however these declines have been minimal.
From http://newsroom.aaa.com/tag/gas-prices/
Prices in some areas have increased due to extremely cold weather causing refinery issues, yet sub-zero temperatures have also decreased demand for gasoline, which could put some downward pressure on prices. Prices in the majority of states (35) and Washington, D.C. are less expensive than one week ago; however these declines have been minimal.
An oldie-but-goodie -- David Balto on the broken DC gasoline market
David Balto's excellent January, 2013 writing about the broken DC gasoline market remains posted on the website of Senator Bernie Sanders. See http://www.sanders.senate.gov/newsroom/must-read/the-broken-dc-gasoline-market
David Balto's excellent January, 2013 writing about the broken DC gasoline market remains posted on the website of Senator Bernie Sanders. See http://www.sanders.senate.gov/newsroom/must-read/the-broken-dc-gasoline-market
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Do you want to be a blogger for us?
Do you have a story or opinion you'd like to share? We'd like to see it. Send it to donresnikoff@donresnikofflaw.com and include "gasoline owner's blog" in the reference, and we will be happy to consider your submission for publication.
Editorial Comment on motions in DC case against ExxonMobil and distributors
The District of Columbia’s litigation brought against ExxonMobil and local gasoline distributors is now awaiting the D.C. Superior Court’s decision on defendants’ motions to dismiss. I believe that the D.C. Attorney General’s public statements and various court filings reflect facts on the ground that support an enforcement action: exclusive dealing arrangements that ExxonMobil and local distributors have used in the DC market have very likely raised gasoline prices at the pump and are not in the interests of the people of the District of Columbia. The Attorney General has alleged in D.C.’s pending Complaint that the exclusive agreements violate a special DC statute, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”).
D.C.’s Attorney General Irv Nathan explained the local gasoline market’s dysfunction in an excellent letter published by the Washington Post on September 6, 2014. His letter rebutted the Washington Post's editorial criticizing the AG's suit against ExonMobil and local distributors. The letter is at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html
The main point of the AG's letter is straightforward. The vertical exclusive dealing restraints against gasoline retailers imposed by dominant wholesalers in the District of Columbia are harmful because they raise wholesale and retail gasoline prices: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Mr. Nathan’s point is one that sounds in antitrust: exclusive dealing conduct by dominant suppliers, supported by major oil companies, raises prices to station owners and consumers. The D.C. Attorney General’s Complaint uses a special local statute, the RSSA, to stop that conduct -- to stop exclusive supply arrangements forced on station owners by a dominant local gasoline distributor, with large oil company backing.
Use of a special local statute with reduced proof burdens is an admirable alternative or supplement to an antitrust action, assuming, of course, that the special local statute does the job. Briefing and oral argument put the D.C. AG and the defendants on the opposite sides of that question.
In its briefs and oral argument, ExxonMobil argues that the AG's case should be dismissed for three principal reasons that relate to the special local statute:
(1) the Attorney General does not have standing or the authority to bring its claim under the special local statute the AG relies on, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That argument about lack of exclusivity seems to be that the agreement language does not require exclusivity, which seems not to address the AG’s point that the distributor defendants and ExxonMobil actually practice exclusivity.)
ExxonMobil’s brief sees the D.C. Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argue, among other things, that the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority under the RSSA to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit because the RSSA does not give the AG a cause of action.
The Attorney General filed opposition papers and argued in Court that D.C. has a right to sue under the RSSA.
We have several observations. One is that defendants’ arguments under the RSSA lean very heavily on absence of exclusive dealing language in particular contracts, and on ignoring the AG’s allegations that ExxonMobil and local distributors actively coordinate exclusive dealing requirements. Defendants may doubt that the AG can prove allegations of coordinated exclusive dealing conduct (our expectation is the opposite), but that factual dispute should not be decided by a Judge on a motion to dismiss addressed to the pleadings.
Even if it turns out that the Court agrees with defendants that a complaint brought under the RSSA is not the right vehicle to assert antitrust claims, or that the filed Complaint lacks sufficient allegations, it does not follow that the D.C. Complaint should be dismissed with prejudice, and without leave to amend. The facts on the ground as explained in the Attorney General’s public statements and in court documents would support a garden variety antitrust case under federal antitrust laws and D.C. law analogues.
In summary, it is right for the D.C. Attorney General to bring litigation when the AG perceives ongoing harmful restraints of trade and monopolizing, so if the defendants persuade the Court that the current action was brought under the wrong statute or omitted necessary facts, then the Court should allow the AG to bring the action under the right statutes – perhaps federal or local antitrust statutes.
Posted by DAR 1-14-2014
The District of Columbia’s litigation brought against ExxonMobil and local gasoline distributors is now awaiting the D.C. Superior Court’s decision on defendants’ motions to dismiss. I believe that the D.C. Attorney General’s public statements and various court filings reflect facts on the ground that support an enforcement action: exclusive dealing arrangements that ExxonMobil and local distributors have used in the DC market have very likely raised gasoline prices at the pump and are not in the interests of the people of the District of Columbia. The Attorney General has alleged in D.C.’s pending Complaint that the exclusive agreements violate a special DC statute, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”).
D.C.’s Attorney General Irv Nathan explained the local gasoline market’s dysfunction in an excellent letter published by the Washington Post on September 6, 2014. His letter rebutted the Washington Post's editorial criticizing the AG's suit against ExonMobil and local distributors. The letter is at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html
The main point of the AG's letter is straightforward. The vertical exclusive dealing restraints against gasoline retailers imposed by dominant wholesalers in the District of Columbia are harmful because they raise wholesale and retail gasoline prices: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Mr. Nathan’s point is one that sounds in antitrust: exclusive dealing conduct by dominant suppliers, supported by major oil companies, raises prices to station owners and consumers. The D.C. Attorney General’s Complaint uses a special local statute, the RSSA, to stop that conduct -- to stop exclusive supply arrangements forced on station owners by a dominant local gasoline distributor, with large oil company backing.
Use of a special local statute with reduced proof burdens is an admirable alternative or supplement to an antitrust action, assuming, of course, that the special local statute does the job. Briefing and oral argument put the D.C. AG and the defendants on the opposite sides of that question.
In its briefs and oral argument, ExxonMobil argues that the AG's case should be dismissed for three principal reasons that relate to the special local statute:
(1) the Attorney General does not have standing or the authority to bring its claim under the special local statute the AG relies on, the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That argument about lack of exclusivity seems to be that the agreement language does not require exclusivity, which seems not to address the AG’s point that the distributor defendants and ExxonMobil actually practice exclusivity.)
ExxonMobil’s brief sees the D.C. Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argue, among other things, that the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority under the RSSA to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit because the RSSA does not give the AG a cause of action.
The Attorney General filed opposition papers and argued in Court that D.C. has a right to sue under the RSSA.
We have several observations. One is that defendants’ arguments under the RSSA lean very heavily on absence of exclusive dealing language in particular contracts, and on ignoring the AG’s allegations that ExxonMobil and local distributors actively coordinate exclusive dealing requirements. Defendants may doubt that the AG can prove allegations of coordinated exclusive dealing conduct (our expectation is the opposite), but that factual dispute should not be decided by a Judge on a motion to dismiss addressed to the pleadings.
Even if it turns out that the Court agrees with defendants that a complaint brought under the RSSA is not the right vehicle to assert antitrust claims, or that the filed Complaint lacks sufficient allegations, it does not follow that the D.C. Complaint should be dismissed with prejudice, and without leave to amend. The facts on the ground as explained in the Attorney General’s public statements and in court documents would support a garden variety antitrust case under federal antitrust laws and D.C. law analogues.
In summary, it is right for the D.C. Attorney General to bring litigation when the AG perceives ongoing harmful restraints of trade and monopolizing, so if the defendants persuade the Court that the current action was brought under the wrong statute or omitted necessary facts, then the Court should allow the AG to bring the action under the right statutes – perhaps federal or local antitrust statutes.
Posted by DAR 1-14-2014
Judge subjects AAGs to rigorous grilling at hearing on motions to dismiss
On January 9, 2014, a hearing was held in the Superior Court for the District of Columbia before Judge Craig Iscoe on Defendant ExxonMobil’s Motion to Dismiss the Complaint in District of Columbia v. ExxonMobil, and the parallel motion of local gasoline distributor defendants. The District of Columbia’s case was argued by Assistant Attorneys General Catherine A. Jackson and Nicholas A. Bush. ExxonMobil was represented by Christina G. Sarchio of Orrick, Herrington & Sutcliffe, while the defendant distributors were represented by Alphonse M. Alfano of Bassman, Mitchell & Alfano, Chartered.
A major focus of Judge Iscoe’s questions to counsel concerned the issue of whether the District of Columbia had the legal authority to bring the case in its capacity as parens patriae. Mr. Alfano argued that in order for the District to sue as parens patriae, it must show that it has both standing to sue and also a cause of action expressly given in the statute or an implied right of action. He argued that the District had neither. He bolstered his claim by citing to the legislative history which indicates that the DC Attorney General had attempted to have the statute amended to give the Attorney General the right to enforce its provisions, but that this amendment was voted down. Judge Iscoe agreed with counsel that this fact did suggest that it would not be appropriate for the court to find an implied right of action in favor of the DC Attorney General.
Judge Iscoe asked whether an injunction would do any good because he did not recall seeing anything in the complaint to indicate that there were other wholesalers selling Exxon gasoline at lower prices for the retail stations to switch their business to. Mr. Bush explained that there are other wholesaler dealers of Exxon gasoline willing to sell to DC service stations at lower prices.
At this point, ExxonMobil’s attorney, Ms. Sarchio argued that Exxon should be dismissed from the suit because they currently have no marketing agreements or other contracts with the service station owners and that such contracts are required in order for Exxon to be a proper party to the suit. She also argued that Exxon’s contracts with station owners had never been exclusive because they never promised that Exxon would not open a competing Exxon branded station in the other station’s territory. Mr. Bush responded to this argument by explaining that Exxon was a proper party because it had initially created the system of exclusive dealing contracts and that even after assigning them to the distributors, it still had the power to enforce the contracts through its contracts with its distributors.
At the conclusion of the hearing, Judge Iscoe stated that he would not rule from the bench but consider the matter further before deciding. He gave both parties an opportunity to submit short additional submissions within one week, but said that those submissions should put forth no new arguments. Judge Iscoe complimented the respective parties for the thorough job they did in both preparing the briefs and in arguing what was an especially complicated case. He stated that they had each given him a lot of things to think about.
The Judge's questions reflected arguments made in briefs by defendants concerning the sufficiency of the Complaint. As we have said, ExxonMobil argued in briefs that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argued in their briefs that, among other things, the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.hank
Posted by DAR 1-10-2014, with thanks to Kathy Jones for her written report, which is included in this updated post.
On January 9, 2014, a hearing was held in the Superior Court for the District of Columbia before Judge Craig Iscoe on Defendant ExxonMobil’s Motion to Dismiss the Complaint in District of Columbia v. ExxonMobil, and the parallel motion of local gasoline distributor defendants. The District of Columbia’s case was argued by Assistant Attorneys General Catherine A. Jackson and Nicholas A. Bush. ExxonMobil was represented by Christina G. Sarchio of Orrick, Herrington & Sutcliffe, while the defendant distributors were represented by Alphonse M. Alfano of Bassman, Mitchell & Alfano, Chartered.
A major focus of Judge Iscoe’s questions to counsel concerned the issue of whether the District of Columbia had the legal authority to bring the case in its capacity as parens patriae. Mr. Alfano argued that in order for the District to sue as parens patriae, it must show that it has both standing to sue and also a cause of action expressly given in the statute or an implied right of action. He argued that the District had neither. He bolstered his claim by citing to the legislative history which indicates that the DC Attorney General had attempted to have the statute amended to give the Attorney General the right to enforce its provisions, but that this amendment was voted down. Judge Iscoe agreed with counsel that this fact did suggest that it would not be appropriate for the court to find an implied right of action in favor of the DC Attorney General.
Judge Iscoe asked whether an injunction would do any good because he did not recall seeing anything in the complaint to indicate that there were other wholesalers selling Exxon gasoline at lower prices for the retail stations to switch their business to. Mr. Bush explained that there are other wholesaler dealers of Exxon gasoline willing to sell to DC service stations at lower prices.
At this point, ExxonMobil’s attorney, Ms. Sarchio argued that Exxon should be dismissed from the suit because they currently have no marketing agreements or other contracts with the service station owners and that such contracts are required in order for Exxon to be a proper party to the suit. She also argued that Exxon’s contracts with station owners had never been exclusive because they never promised that Exxon would not open a competing Exxon branded station in the other station’s territory. Mr. Bush responded to this argument by explaining that Exxon was a proper party because it had initially created the system of exclusive dealing contracts and that even after assigning them to the distributors, it still had the power to enforce the contracts through its contracts with its distributors.
At the conclusion of the hearing, Judge Iscoe stated that he would not rule from the bench but consider the matter further before deciding. He gave both parties an opportunity to submit short additional submissions within one week, but said that those submissions should put forth no new arguments. Judge Iscoe complimented the respective parties for the thorough job they did in both preparing the briefs and in arguing what was an especially complicated case. He stated that they had each given him a lot of things to think about.
The Judge's questions reflected arguments made in briefs by defendants concerning the sufficiency of the Complaint. As we have said, ExxonMobil argued in briefs that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argued in their briefs that, among other things, the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.hank
Posted by DAR 1-10-2014, with thanks to Kathy Jones for her written report, which is included in this updated post.
Watch for our report on the scheduled in local District of Columbia gasoline distribution litigation brought by the AG against ExxonMobil and its DC Distributors
Watch for our report on the hearing that will be held on defendants' motions to dismiss.
Hearing details
Event: Motion Hearing
Date: 01/09/2014 Time: 10:00 am
Judge: ISCOE, CRAIG Location: Courtroom 200
Watch for our report on the hearing that will be held on defendants' motions to dismiss.
Hearing details
Event: Motion Hearing
Date: 01/09/2014 Time: 10:00 am
Judge: ISCOE, CRAIG Location: Courtroom 200
Happy New Year 2014: Doug Short says that demand for retail gasoline is declining
In his December, 2013 report, analyst Doug Short says that the trend is down for retail gasoline consumption. "In addition to improvements in fuel efficiency, the decline in gasoline consumption is attributable in large part to some powerful secular changes in US demographics and cultural in general."
The report is at http://advisorperspectives.com/dshort/updates/Gasoline-Sales.php
In his December, 2013 report, analyst Doug Short says that the trend is down for retail gasoline consumption. "In addition to improvements in fuel efficiency, the decline in gasoline consumption is attributable in large part to some powerful secular changes in US demographics and cultural in general."
The report is at http://advisorperspectives.com/dshort/updates/Gasoline-Sales.php
Class action alleging that BP sold bad gasoline is settled
Residents of certain states who purchased BP gasoline at particular retail outlets between August 13, 2012 and September 7, 2012 and experienced engine or drivability issues may be eligible for reimbursement of gasoline purchase price, cost of repairs, and additional expenses associated with repairs. Click here for details and claim form.
Residents of certain states who purchased BP gasoline at particular retail outlets between August 13, 2012 and September 7, 2012 and experienced engine or drivability issues may be eligible for reimbursement of gasoline purchase price, cost of repairs, and additional expenses associated with repairs. Click here for details and claim form.
BP overcharged Oregonians at Arco and ampm gas stations, class-action suit alleges
From an article by Laura Gunderson (lgunderson@oregonian.com)
A Portland lawyer has filed a class-action lawsuit on behalf of an Oregon consumer who alleges he was wrongly charged 35 cents on a debit purchase of gas at a station where no signs clearly warned of the added cost. A class-action lawsuit has been filed against BP West Coast Products alleging the company required gas stations in Oregon to charge customers 35 cents when they bought gas with a debit card.
David Sugerman, the Portland lawyer who filed the suit with the Multnomah County Circuit Court, said that BP -- through its franchisees – charged the fee when it shouldn’t have and also failed to alert customers of the fee until gas was in their car and it was time to pay.
The full article is at http://blog.oregonlive.com/business_impact/print.html?entry=/2013/11/class-action_suit_alleges_oreg.html
From an article by Laura Gunderson (lgunderson@oregonian.com)
A Portland lawyer has filed a class-action lawsuit on behalf of an Oregon consumer who alleges he was wrongly charged 35 cents on a debit purchase of gas at a station where no signs clearly warned of the added cost. A class-action lawsuit has been filed against BP West Coast Products alleging the company required gas stations in Oregon to charge customers 35 cents when they bought gas with a debit card.
David Sugerman, the Portland lawyer who filed the suit with the Multnomah County Circuit Court, said that BP -- through its franchisees – charged the fee when it shouldn’t have and also failed to alert customers of the fee until gas was in their car and it was time to pay.
The full article is at http://blog.oregonlive.com/business_impact/print.html?entry=/2013/11/class-action_suit_alleges_oreg.html
Did Wall Street pay academics to argue for speculative oil trading?
The New York Times reports that Wall Street paid academic experts — and gave money to their universities — whose research supported the financial community’s views on speculative commodity trading, including speculative trading in oil futures.
The article is at http://www.nytimes.com/2013/12/28/business/academics-who-defend-wall-st-reap-reward.html?hp
The New York Times reports that Wall Street paid academic experts — and gave money to their universities — whose research supported the financial community’s views on speculative commodity trading, including speculative trading in oil futures.
The article is at http://www.nytimes.com/2013/12/28/business/academics-who-defend-wall-st-reap-reward.html?hp
Minnesota's first station to offer 15 percent ethanol fuel
MINNEAPOLIS (AP) -- Corn growers and independent gas stations are teaming up to bring the higher-ethanol fuel known as E15 to Minnesota drivers, putting themselves in conflict with the automotive and oil industries.
Penn Mobil in south Minneapolis is Minnesota's first station to offer the 15 percent ethanol fuel, the Star Tribune reported Tuesday (http://bit.ly/17qb4h9 ). Some other stations are also planning to add the new blend. To make it attractive, Penn Mobil is selling E15 for 15 cents a gallon cheaper than E10, the standard 10 percent blend.
The Minnesota Corn Growers Association is chipping in $2 million and the Minnesota Department of Agriculture another $1 million over two years to subsidize the gas-pump upgrades needed to allow the stations to dispense E15. With 21 ethanol plants, Minnesota is one of the largest producers of the corn-based biofuel.
Most U.S. cars and trucks were designed for E10. The Environmental Protection Agency has approved E15 for 2001 and newer cars, SUVs and light trucks. But the auto industry doesn't endorse E15.
Full article: http://finance.yahoo.com/news/minneapolis-gas-station-offers-higher-162347244.html
MINNEAPOLIS (AP) -- Corn growers and independent gas stations are teaming up to bring the higher-ethanol fuel known as E15 to Minnesota drivers, putting themselves in conflict with the automotive and oil industries.
Penn Mobil in south Minneapolis is Minnesota's first station to offer the 15 percent ethanol fuel, the Star Tribune reported Tuesday (http://bit.ly/17qb4h9 ). Some other stations are also planning to add the new blend. To make it attractive, Penn Mobil is selling E15 for 15 cents a gallon cheaper than E10, the standard 10 percent blend.
The Minnesota Corn Growers Association is chipping in $2 million and the Minnesota Department of Agriculture another $1 million over two years to subsidize the gas-pump upgrades needed to allow the stations to dispense E15. With 21 ethanol plants, Minnesota is one of the largest producers of the corn-based biofuel.
Most U.S. cars and trucks were designed for E10. The Environmental Protection Agency has approved E15 for 2001 and newer cars, SUVs and light trucks. But the auto industry doesn't endorse E15.
Full article: http://finance.yahoo.com/news/minneapolis-gas-station-offers-higher-162347244.html
Is E85 ethanol blend competitive at the pump?
From a Chicago Tribune Article:
The number of fuel stations offering E85 has slowly grown from a handful in 1995 to more than 3,000 today, out of more than 100,000 fuel stations in the country. They are concentrated in Corn Belt states such as Iowa and Minnesota, where filling up with ethanol can be a political statement.
Automakers, led by General Motors, can adapt a conventional car into a flex-fuel vehicle simply by adding extra equipment - enhancements in hoses, censors and fuel pumps - that cost a few hundred dollars.
Customers in search of "green" transportation have shown interest in purchasing the vehicles. Some 15 million flex-fuel vehicles are on the road today, up from fewer than 1 million in 2000.
But when it comes time to fill those vehicles, many drivers decline to gas up with E85 fuel.
In large measure, that is because cars using the higher ethanol mix generally get about 25 percent fewer miles per gallon than they do with standard gasoline, due to the lower energy content of the blended fuel.
For E85 to make economic sense for a driver, the fuel generally must sell at a discount of at least 25 percent from the cost of gasoline. The average discount this week across the United States was only 17 percent, according to the fuel monitoring website E85prices.com.
Full article:http://articles.chicagotribune.com/2013-11-27/marketplace/sns-rt-us-usa-ethanol-e85-analysis-20131127_1_protec-fuel-federal-renewable-fuel-standard-e85/2
From a Chicago Tribune Article:
The number of fuel stations offering E85 has slowly grown from a handful in 1995 to more than 3,000 today, out of more than 100,000 fuel stations in the country. They are concentrated in Corn Belt states such as Iowa and Minnesota, where filling up with ethanol can be a political statement.
Automakers, led by General Motors, can adapt a conventional car into a flex-fuel vehicle simply by adding extra equipment - enhancements in hoses, censors and fuel pumps - that cost a few hundred dollars.
Customers in search of "green" transportation have shown interest in purchasing the vehicles. Some 15 million flex-fuel vehicles are on the road today, up from fewer than 1 million in 2000.
But when it comes time to fill those vehicles, many drivers decline to gas up with E85 fuel.
In large measure, that is because cars using the higher ethanol mix generally get about 25 percent fewer miles per gallon than they do with standard gasoline, due to the lower energy content of the blended fuel.
For E85 to make economic sense for a driver, the fuel generally must sell at a discount of at least 25 percent from the cost of gasoline. The average discount this week across the United States was only 17 percent, according to the fuel monitoring website E85prices.com.
Full article:http://articles.chicagotribune.com/2013-11-27/marketplace/sns-rt-us-usa-ethanol-e85-analysis-20131127_1_protec-fuel-federal-renewable-fuel-standard-e85/2
Ethanol advocates reject "blend-wall" allegations of oil companies; FTC inquiry concerning joint oil company conduct is ongoing
An advocacy article favoring use of ethanol alleges that there are legal and economical ways for refiners to meet their renewable fuel blending obligations. "Instead, Big Oil is using all its energy and power to push the U.S. EPA to decrease the renewable fuels portion of the renewable fuel standard (RFS) to protect its monopoly. The petroleum industry claims its hitting a 'blend wall' and is unable to blend higher levels of ethanol. They base this assertion on a controversial study by the Coordinating Research Council falsely concluding that E15 will damage vehicle engines. The National Renewable Energy Laboratory delved deeper and unveiled the many inconsistencies and problems with the CRC study, ultimately disputing any evidence that E15 caused engine damage."
See http://ethanolproducer.com/articles/10463/nrel-report-counters-big-oilundefineds-false-e15-claim
There is an ongoing inquiry by the FTC of allegations of concerted action on ethanol by the oil companies. Press reports say that Amy Klobuchar [D-MN] and Chuck Grassley [R-IA]requested that the Federal Trade Commission look into "reports of oil companies pressing independent gas stations to sell premium gasoline in addition to regular gasoline," which blocks sales of ethanol blends. See http://www.greencarreports.com/news/1086645_gas-stations-claim-oil-companies-block-e15-ftc-to-investigate (A letter from FTC Commissioner Ramirez confirmed the existence of an inquiry, without being clear whether a formal investigation was launched.)
Some states require flood-prone stations to wire up to back-up generators
According to an interesting article in the December newsletter of the Gasoline Retailers Association of Florida, New York State legislators have approved a bill requiring many gas stations in New York City, on Long Island, and in other communities susceptible to flooding to install emergency switches to wire up with nearby backup power generators. Similar bills in New Jersey are reported as stalled because of business opposition. In Florida, state legislators passed a law in 2005 requiring service stations near highways and evacuation routes to have access to backup power. It is not clear how expensive it is for stations to meet the back-up generator requirement.
The article can be found at
http://www.angelfire.com/zine/flagas/
According to an interesting article in the December newsletter of the Gasoline Retailers Association of Florida, New York State legislators have approved a bill requiring many gas stations in New York City, on Long Island, and in other communities susceptible to flooding to install emergency switches to wire up with nearby backup power generators. Similar bills in New Jersey are reported as stalled because of business opposition. In Florida, state legislators passed a law in 2005 requiring service stations near highways and evacuation routes to have access to backup power. It is not clear how expensive it is for stations to meet the back-up generator requirement.
The article can be found at
http://www.angelfire.com/zine/flagas/
Hints of Possible Marathon interest in acquiring Hess
During Marathon Petroleum Corporation's (MPC) third-quarter earnings call several days ago, MPC's president praising Hess Corp.'s retail network, which is up for sale, as "one of the best looking systems on the East Coast". Marathon's subsidiary Speedway has recently begun expansion into Tennessee and Pennsylvania, and there have been hints that Speedway could consider purchasing the Hess network.
From an article in the December newsletter of the Gasoline Retailers Association of Florida, URL http://www.angelfire.com/zine/flagas/
During Marathon Petroleum Corporation's (MPC) third-quarter earnings call several days ago, MPC's president praising Hess Corp.'s retail network, which is up for sale, as "one of the best looking systems on the East Coast". Marathon's subsidiary Speedway has recently begun expansion into Tennessee and Pennsylvania, and there have been hints that Speedway could consider purchasing the Hess network.
From an article in the December newsletter of the Gasoline Retailers Association of Florida, URL http://www.angelfire.com/zine/flagas/
Hearing scheduled in local District of Columbia gasoline distribution litigation brought by the AG against ExxonMobil and its DC Distributors
As we've discussed, the DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
A lot has happened in the litigation. ExxonMobil has moved to dismiss the AG's Complaint, and so have the local Exxon distributors. The parties' papers on the motions can be found through links in an earlier posting.
Now a hearing is set on the motions: Here is the Court's docket entry for December 13, 2013:
Event Scheduled
Event: Motion Hearing
Date: 01/09/2014 Time: 10:00 am
Judge: ISCOE, CRAIG Location: Courtroom 200
The hearing will be open to the public.
Posted by DAR 12/23/2013
As we've discussed, the DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
A lot has happened in the litigation. ExxonMobil has moved to dismiss the AG's Complaint, and so have the local Exxon distributors. The parties' papers on the motions can be found through links in an earlier posting.
Now a hearing is set on the motions: Here is the Court's docket entry for December 13, 2013:
Event Scheduled
Event: Motion Hearing
Date: 01/09/2014 Time: 10:00 am
Judge: ISCOE, CRAIG Location: Courtroom 200
The hearing will be open to the public.
Posted by DAR 12/23/2013
Long term EIA report predicts retail gas price decline in 2014
"With lower crude oil prices and lower gasoline demand projected in the AEO2014 Reference case, the real end-use price of motor gasoline in the United States declines to $3.03 per gallon (2012 dollars) in 2017, then rises to $3.90 per gallon in 2040 (compared
to $4.40 per gallon in 2040 in AEO2013). The end-use price of diesel fuel in the transportation sector follows a similar pattern, dropping to $3.50 per gallon in 2017 and then rising to $4.73 per gallon in 2040 (compared to $5.03 per gallon in AEO2013).
Although both gasoline and diesel prices dip modestly in the early years of the projection period, they increase steadily thereafter. The diesel share of total domestic petroleum and other liquids production rises, and the gasoline share falls, mostly as a result of
the greenhouse gas (GHG) and CAFE standards for LDVs beginning in model year 2017. Increasing demand for diesel puts pressure on refiners to increase diesel yields and results in a rising difference between diesel prices and gasoline prices from 2017 to 2025.
Legislated targets for cellulosic fuels use mandated by the Energy Independence and Security Act of 2007 (EISA2007) are not attained, as the U.S. Environmental Protection Agency (EPA)21 continues to make use of the flexibility provided in the statute to
adjust those requirements."
See http://www.eia.gov/forecasts/aeo/er/pdf/0383er%282014%29.pdf
"With lower crude oil prices and lower gasoline demand projected in the AEO2014 Reference case, the real end-use price of motor gasoline in the United States declines to $3.03 per gallon (2012 dollars) in 2017, then rises to $3.90 per gallon in 2040 (compared
to $4.40 per gallon in 2040 in AEO2013). The end-use price of diesel fuel in the transportation sector follows a similar pattern, dropping to $3.50 per gallon in 2017 and then rising to $4.73 per gallon in 2040 (compared to $5.03 per gallon in AEO2013).
Although both gasoline and diesel prices dip modestly in the early years of the projection period, they increase steadily thereafter. The diesel share of total domestic petroleum and other liquids production rises, and the gasoline share falls, mostly as a result of
the greenhouse gas (GHG) and CAFE standards for LDVs beginning in model year 2017. Increasing demand for diesel puts pressure on refiners to increase diesel yields and results in a rising difference between diesel prices and gasoline prices from 2017 to 2025.
Legislated targets for cellulosic fuels use mandated by the Energy Independence and Security Act of 2007 (EISA2007) are not attained, as the U.S. Environmental Protection Agency (EPA)21 continues to make use of the flexibility provided in the statute to
adjust those requirements."
See http://www.eia.gov/forecasts/aeo/er/pdf/0383er%282014%29.pdf
From AAA’s Fuel Gauge Report | December 9, 2013
(WASHINGTON, December 9, 2013) The national average price of gasoline has fallen nine of 12 days since Thanksgiving. This follows a streak of 15 consecutive daily increases leading up to the holiday.
* * *
Price-movement over the last several weeks has been a mixed bag at the state level, and while pump prices in 20 states have continued to march lower, prices in 30 states and Washington, D.C. have drifted higher.
* * *
Underlying the recent volatility in state average gas prices has been the price of West Texas Intermediate (WTI) crude oil. After 15 straight weeks above $100 per barrel, WTI begins an eighth consecutive week below this threshold, even after settling higher every day last week on positive economic news including a rosier than expected job report on Friday that built on bullish global indicators earlier in the week.
For the complete report see http://newsroom.aaa.com/2013/12/gas-prices-aaas-fuel-gauge-report-december-9-2013/
(WASHINGTON, December 9, 2013) The national average price of gasoline has fallen nine of 12 days since Thanksgiving. This follows a streak of 15 consecutive daily increases leading up to the holiday.
* * *
Price-movement over the last several weeks has been a mixed bag at the state level, and while pump prices in 20 states have continued to march lower, prices in 30 states and Washington, D.C. have drifted higher.
* * *
Underlying the recent volatility in state average gas prices has been the price of West Texas Intermediate (WTI) crude oil. After 15 straight weeks above $100 per barrel, WTI begins an eighth consecutive week below this threshold, even after settling higher every day last week on positive economic news including a rosier than expected job report on Friday that built on bullish global indicators earlier in the week.
For the complete report see http://newsroom.aaa.com/2013/12/gas-prices-aaas-fuel-gauge-report-december-9-2013/
Company profile: Global Partners
Global Partners is an interesting company. Its 2012 10K form filed with the SEC says that it is wholesaler for a number of national oil companies:
As of December 31, 2012, we had a portfolio of approximately 1,000 owned, leased and/or supplied gasoline stations primarily in the Northeast.
In September 2010, we completed the acquisition from ExxonMobil Corporation ("ExxonMobil") of 190 retail gasoline stations, together with the rights to (i) supply Mobil-branded fuel to those stations as well as an additional 31 existing locations in Massachusetts, New Hampshire and Rhode Island, and (ii) expand supply opportunities for Mobil-branded and Exxon-branded fuel in certain other New England states. This acquisition expanded our supply business and added vertical integration to our transportation fuel business in New England.
On March 1, 2012, we acquired Alliance Energy LLC ("Alliance"), a gasoline distributor and operator of gasoline stations and convenience stores. As of the date of the acquisition, Alliance's portfolio included approximately 540 gasoline stations in the Northeast, of which it owned or held under long-term lease approximately 250 stations, and had supply contracts for the remaining stations. The Alliance acquisition expanded our geographic footprint for gasoline stations to include Connecticut, New Jersey, New York, Pennsylvania, Maine and Vermont. Alliance is a top-tier distributor of multiple brands, including Exxon, Mobil,
Shell, Sunoco, CITGO and Gulf.
* * *
On April 26, 2012, we entered into an agreement with Getty Realty Corp. ("Getty Realty") to supply and provide management services to more than 200 of its gasoline stations in New York and New Jersey. On November 19, 2012, we signed a long-term lease agreement with Getty Realty for approximately 90 of those 200 sites which enables us to supply gasoline to and operate gasoline stations in the New York City boroughs of Queens, Manhattan and the Bronx, as well as in Long Island and Westchester County. The lease with Getty Realty significantly expands our retail gasoline and fuel distribution presence in the New York City metro region.
Another interesting aspect of the Global Partners business is its acquisition and transportation of gasoline from afar. The filing explains:
We own, control or have access to one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast. We engage in the logistics of gathering, storage, transportation and marketing of refined petroleum products, renewable fuels and crude oil. We are one of the largest distributors of gasoline (including gasoline blendstocks such as ethanol and naphtha), distillates (such as home heating oil, diesel and kerosene), residual oil and renewable fuels to wholesalers in the New England states and New York. In addition, we sell crude oil to refiners.
On January 1, 2013, we signed a five-year contract with Phillips 66 under which we will use our storage, rail transloading, logistics and transportation system to deliver crude oil from the Bakken region of North Dakota to Phillips 66's Bayway, New Jersey refinery.
On February 1, 2013, we acquired a 60% membership interest in Basin Transload LLC ("Basin Transload"), which operates two transloading facilities (which are facilities used for transferring product shipments from one mode of transportation to another) in North Dakota. On February 15, 2013, we acquired 100% of the
membership interests in Cascade Kelly Holdings LLC ("Cascade Kelly"), which owns a West Coast crude oil and ethanol facility near Portland,
Oregon. See "—Recent Developments" for a further discussion on these transactions.
We believe we have created a "virtual pipeline" solution for the transportation of crude oil and other products from the mid-continent region of the
United States and Canada to the East and West Coasts. This "virtual pipeline" consists of our strategically located terminal assets, our logistical
capabilities and access to railroad and barge transportation. We have enhanced our capabilities and our business with the Phillips 66, Basin Transload
and Cascade Kelly transactions early in 2013.
Posted by DAR 12-13-2013
Global Partners is an interesting company. Its 2012 10K form filed with the SEC says that it is wholesaler for a number of national oil companies:
As of December 31, 2012, we had a portfolio of approximately 1,000 owned, leased and/or supplied gasoline stations primarily in the Northeast.
In September 2010, we completed the acquisition from ExxonMobil Corporation ("ExxonMobil") of 190 retail gasoline stations, together with the rights to (i) supply Mobil-branded fuel to those stations as well as an additional 31 existing locations in Massachusetts, New Hampshire and Rhode Island, and (ii) expand supply opportunities for Mobil-branded and Exxon-branded fuel in certain other New England states. This acquisition expanded our supply business and added vertical integration to our transportation fuel business in New England.
On March 1, 2012, we acquired Alliance Energy LLC ("Alliance"), a gasoline distributor and operator of gasoline stations and convenience stores. As of the date of the acquisition, Alliance's portfolio included approximately 540 gasoline stations in the Northeast, of which it owned or held under long-term lease approximately 250 stations, and had supply contracts for the remaining stations. The Alliance acquisition expanded our geographic footprint for gasoline stations to include Connecticut, New Jersey, New York, Pennsylvania, Maine and Vermont. Alliance is a top-tier distributor of multiple brands, including Exxon, Mobil,
Shell, Sunoco, CITGO and Gulf.
* * *
On April 26, 2012, we entered into an agreement with Getty Realty Corp. ("Getty Realty") to supply and provide management services to more than 200 of its gasoline stations in New York and New Jersey. On November 19, 2012, we signed a long-term lease agreement with Getty Realty for approximately 90 of those 200 sites which enables us to supply gasoline to and operate gasoline stations in the New York City boroughs of Queens, Manhattan and the Bronx, as well as in Long Island and Westchester County. The lease with Getty Realty significantly expands our retail gasoline and fuel distribution presence in the New York City metro region.
Another interesting aspect of the Global Partners business is its acquisition and transportation of gasoline from afar. The filing explains:
We own, control or have access to one of the largest terminal networks of refined petroleum products and renewable fuels in the Northeast. We engage in the logistics of gathering, storage, transportation and marketing of refined petroleum products, renewable fuels and crude oil. We are one of the largest distributors of gasoline (including gasoline blendstocks such as ethanol and naphtha), distillates (such as home heating oil, diesel and kerosene), residual oil and renewable fuels to wholesalers in the New England states and New York. In addition, we sell crude oil to refiners.
On January 1, 2013, we signed a five-year contract with Phillips 66 under which we will use our storage, rail transloading, logistics and transportation system to deliver crude oil from the Bakken region of North Dakota to Phillips 66's Bayway, New Jersey refinery.
On February 1, 2013, we acquired a 60% membership interest in Basin Transload LLC ("Basin Transload"), which operates two transloading facilities (which are facilities used for transferring product shipments from one mode of transportation to another) in North Dakota. On February 15, 2013, we acquired 100% of the
membership interests in Cascade Kelly Holdings LLC ("Cascade Kelly"), which owns a West Coast crude oil and ethanol facility near Portland,
Oregon. See "—Recent Developments" for a further discussion on these transactions.
We believe we have created a "virtual pipeline" solution for the transportation of crude oil and other products from the mid-continent region of the
United States and Canada to the East and West Coasts. This "virtual pipeline" consists of our strategically located terminal assets, our logistical
capabilities and access to railroad and barge transportation. We have enhanced our capabilities and our business with the Phillips 66, Basin Transload
and Cascade Kelly transactions early in 2013.
Posted by DAR 12-13-2013
From the December 2, 2013 AAA report on gasoline prices:
"[The] recent increase in retail prices was keyed by planned and unplanned maintenance at a number of Gulf Coast refineries and seasonally stronger demand for gasoline. Wholesale gasoline prices in the Gulf Coast market have declined significantly over the last week as these refineries have come back on line and production concerns have been alleviated. While retail prices in states like Florida remain inflated from these supply and distribution issues, pump prices are likely to fall in the coming days and weeks as cheaper wholesale gasoline makes its way to consumers.
One factor not contributing to rising pump prices has been the price of crude oil. On July 3 the price of West Texas Intermediate (WTI) crude oil rose above $100 per barrel where it remained for 15 straight weeks. This streak came to an end on October 21 and WTI has now settled below the $100 per barrel mark for seven straight weeks. At the close of formal trading on the NYMEX WTI settled $1.10 higher at $93.82 per barrel. Despite today’s increase, crude oil still remains near the multi-month low of $92.30 per barrel registered last Wednesday."
For the complete report see http://newsroom.aaa.com/2013/12/gas-prices-aaas-fuel-gauge-report-december-2-2013/
"[The] recent increase in retail prices was keyed by planned and unplanned maintenance at a number of Gulf Coast refineries and seasonally stronger demand for gasoline. Wholesale gasoline prices in the Gulf Coast market have declined significantly over the last week as these refineries have come back on line and production concerns have been alleviated. While retail prices in states like Florida remain inflated from these supply and distribution issues, pump prices are likely to fall in the coming days and weeks as cheaper wholesale gasoline makes its way to consumers.
One factor not contributing to rising pump prices has been the price of crude oil. On July 3 the price of West Texas Intermediate (WTI) crude oil rose above $100 per barrel where it remained for 15 straight weeks. This streak came to an end on October 21 and WTI has now settled below the $100 per barrel mark for seven straight weeks. At the close of formal trading on the NYMEX WTI settled $1.10 higher at $93.82 per barrel. Despite today’s increase, crude oil still remains near the multi-month low of $92.30 per barrel registered last Wednesday."
For the complete report see http://newsroom.aaa.com/2013/12/gas-prices-aaas-fuel-gauge-report-december-2-2013/
Cheap supermarket gas excites opposition in California
From an article by LORI A. CARTER in THE PRESS DEMOCRAT
Safeway stores in Sonoma County are beginning to offer more than milk, bread and other groceries. They are soon going to start selling you gas — but not without controversy.
A Union 76 station at Mendocino Avenue and Steele Lane/Lewis Road in Santa Rosa is being remodeled into a Safeway-brand station.
While that changeover hasn't prompted any opposition, a 16-pump station proposed in Petaluma is raising questions among independent station owners and city leaders.
Their concerns range from unfair competition for the city's independent gas stations, to additional traffic at the city's most congested intersection, to air quality degradation near a school and day care facilities.
A Safeway spokeswoman declined to comment on the Petaluma proposal or discuss in detail the company's gas station strategy.
In a series of lawsuits against Safeway in the past five years, a Petaluma lawyer has represented several East Bay independent gas station owners who argue that the grocery giant's discount programs and gas pricing are illegally designed to drive them out of business.
Last year, an Alameda County court granted Dixon-area gas station owners an injunction that prohibited Safeway in that area from selling gas below cost in connection with its Club Card discount. That particular program was discontinued in Northern California after the ruling.
Another suit recently was decided in Safeway's favor, allowing the continued use of the Fuel Rewards program, which earns grocery customers a 10-cent-per-gallon discount at some Chevron and Safeway stations with a certain amount in grocery purchases.
For the complete article: http://www.petaluma360.com/article/20130824/community/130829735
From an article by LORI A. CARTER in THE PRESS DEMOCRAT
Safeway stores in Sonoma County are beginning to offer more than milk, bread and other groceries. They are soon going to start selling you gas — but not without controversy.
A Union 76 station at Mendocino Avenue and Steele Lane/Lewis Road in Santa Rosa is being remodeled into a Safeway-brand station.
While that changeover hasn't prompted any opposition, a 16-pump station proposed in Petaluma is raising questions among independent station owners and city leaders.
Their concerns range from unfair competition for the city's independent gas stations, to additional traffic at the city's most congested intersection, to air quality degradation near a school and day care facilities.
A Safeway spokeswoman declined to comment on the Petaluma proposal or discuss in detail the company's gas station strategy.
In a series of lawsuits against Safeway in the past five years, a Petaluma lawyer has represented several East Bay independent gas station owners who argue that the grocery giant's discount programs and gas pricing are illegally designed to drive them out of business.
Last year, an Alameda County court granted Dixon-area gas station owners an injunction that prohibited Safeway in that area from selling gas below cost in connection with its Club Card discount. That particular program was discontinued in Northern California after the ruling.
Another suit recently was decided in Safeway's favor, allowing the continued use of the Fuel Rewards program, which earns grocery customers a 10-cent-per-gallon discount at some Chevron and Safeway stations with a certain amount in grocery purchases.
For the complete article: http://www.petaluma360.com/article/20130824/community/130829735
From the Yglesias (Slate) commentary on the D.C. Costco gas story:
"Naturally, DC's other gasoline retailers are upset [by DC's complicated regulatory approval of Costco gas sales] and now a furious lobbying battle is under way largely between Coscto and a Virginia businessman named Eyob Mamo who's the biggest player in the local industry. Read Mike DeBonis's excellent feature on this for all the details.
In terms of the policy fundamentals, I think the issue here that local officials need to grapple with is whether they want the retail price of gasoline to be lower or not."
It's not at all clear that Yglesias favors low gas prices, but he does focus on the policy question for local officials and suggest something better than the current Rube Goldberg regulatory scheme.
The Slate article is at http://www.slate.com/blogs/moneybox/2013/11/29/costco_gasoline_station_cheap_gasoline_is_a_bad_idea.html
Posted by DAR 12-0-2013
"Naturally, DC's other gasoline retailers are upset [by DC's complicated regulatory approval of Costco gas sales] and now a furious lobbying battle is under way largely between Coscto and a Virginia businessman named Eyob Mamo who's the biggest player in the local industry. Read Mike DeBonis's excellent feature on this for all the details.
In terms of the policy fundamentals, I think the issue here that local officials need to grapple with is whether they want the retail price of gasoline to be lower or not."
It's not at all clear that Yglesias favors low gas prices, but he does focus on the policy question for local officials and suggest something better than the current Rube Goldberg regulatory scheme.
The Slate article is at http://www.slate.com/blogs/moneybox/2013/11/29/costco_gasoline_station_cheap_gasoline_is_a_bad_idea.html
Posted by DAR 12-0-2013
Washington Post reports on controversy surrounding the new low price Costco gas station in NE DC
According to a Washington Post article, (11/28/2013) AAA
spokesman John B. Townsend II says that a new Costco station in NE Washington,
DC has prices that have so far been consistently 30 cents below the average for
regular gas in the District, where prices are generally at least 5 percent
higher than in Maryland and Virginia.
The Post article reports that proponents of the Costco gas station say that influential local gasoline entrepreneur Ayub Mamo and his dealers drummed up their legal opposition to the Costco station to protect their profit margins from a fearsome new competitor. (Companies associated with Mamo, and supplier ExxonMobil, are currently being sued by the DC Attorney General for gasoline distribution policies the AG alleges lead to high prices to dealers and consumers.)
The controversy is not necessarily always polite. According to the Post, the
dealers aligned with Mamo have fought proposals to open the Costco station at a
series of hearings and meetings, including a contentious vote held more than a
year ago by the local elected advisory neighborhood commission. According to the
Post, one of the commissioners says that after that meeting, which ended with
the commission supporting the gas station, he received the death threats by
phone to his home.
The Post article is at http://www.washingtonpost.com/local/dc-politics/costco-sells-cheap-gas-but-with-controversy/2013/11/28/6fab801e-5390-11e3-9fe0-fd2ca728e67c_story_1.html
According to a Washington Post article, (11/28/2013) AAA
spokesman John B. Townsend II says that a new Costco station in NE Washington,
DC has prices that have so far been consistently 30 cents below the average for
regular gas in the District, where prices are generally at least 5 percent
higher than in Maryland and Virginia.
The Post article reports that proponents of the Costco gas station say that influential local gasoline entrepreneur Ayub Mamo and his dealers drummed up their legal opposition to the Costco station to protect their profit margins from a fearsome new competitor. (Companies associated with Mamo, and supplier ExxonMobil, are currently being sued by the DC Attorney General for gasoline distribution policies the AG alleges lead to high prices to dealers and consumers.)
The controversy is not necessarily always polite. According to the Post, the
dealers aligned with Mamo have fought proposals to open the Costco station at a
series of hearings and meetings, including a contentious vote held more than a
year ago by the local elected advisory neighborhood commission. According to the
Post, one of the commissioners says that after that meeting, which ended with
the commission supporting the gas station, he received the death threats by
phone to his home.
The Post article is at http://www.washingtonpost.com/local/dc-politics/costco-sells-cheap-gas-but-with-controversy/2013/11/28/6fab801e-5390-11e3-9fe0-fd2ca728e67c_story_1.html
A thriving independent station in Meadville, PA
MEADVILLE — The question has circulated around Meadville for over a year now: How can All-American Gas Station and Car Wash afford to be 10 cents cheaper than its competitors?
The lone, independent station sitting at the crest of Route 322 near the Interstate 79 interchange has been owned and operated by local company Travaglini Enterprises for several years and plateaued financially by early 2012, according to Don Fagley, vice president of operations.
“Our former president, Alan Travaglini, had an idea around February of last year,” he said. “If we were able to maintain our cost of gas at a dime less, it would benefit our customers and generate more traffic for our car wash.”
See the complete article: April 2, 2013 At 10 cents cheaper, independent gas station thriving By Konstantine Fekos Meadville Tribune
MEADVILLE — The question has circulated around Meadville for over a year now: How can All-American Gas Station and Car Wash afford to be 10 cents cheaper than its competitors?
The lone, independent station sitting at the crest of Route 322 near the Interstate 79 interchange has been owned and operated by local company Travaglini Enterprises for several years and plateaued financially by early 2012, according to Don Fagley, vice president of operations.
“Our former president, Alan Travaglini, had an idea around February of last year,” he said. “If we were able to maintain our cost of gas at a dime less, it would benefit our customers and generate more traffic for our car wash.”
See the complete article: April 2, 2013 At 10 cents cheaper, independent gas station thriving By Konstantine Fekos Meadville Tribune
Fewer Costco, Giant, and Liberty stations = higher prices for consumers, and not necessarily a better profit margin for the big brand franchise retailer
It seems to be common sense that competition from unbranded gasoline sold by independent companies at low prices will cause lower prices in a market. Scholars have long since noticed the point. A California law journal study says:
"The decrease in the number of independent unbranded retailers offers a competing explanation for increased prices. Independent stations typically compete on price with little non-price product differentiation. These stations are completely independent from the refiner in that the gasoline dealer owns the station, and sells "unbranded" gasoline that can be purchased from any supplier. The unbranded station typically competes with other stations by offering the lowest price gasoline. When these stations are replaced by branded integrated stations (or exit the market), price competition in the market may be softened, resulting in a higher equilibrium price."
Well, yes. And the presence of independent low-price competitors like Costco, Giant, and Liberty will not necessarily hurt major brand franchise retail dealers charged high prices by wholesale suppliers. For the franchise dealers it is the profit spread that counts -- the difference between wholesale and retail -- not the absolute price.
Local government policy should encourage competition, and facilitate low-priced unbranded competition. Competition will force all prices in the market to be lower. Government should not discourage competition through regulation that blocks or limits competitors like Costco, Giant, and Liberty. (In DC, the regulation in issue concerning Costco is whether Costco can sell alcohol in its retail store and gasoline from its adjoining service station.) The government should do just the opposite – encourage competition. Competition is an idea that local legislators should support, even if competition is something large and influential wholesalers resent.
The scholarly article I cited is called “Vertical Relationships and Competition in Retail
Gasoline Markets, Empirical Evidence from Contract Changes in Southern California,” by Justine S. Hastings, Yale University, and can be found at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.econ.yale.edu%2F~jh529%2Fpapers%2FHastings_Final_March2004.pdf&ei=FG6ZUo3tCo_1oASr8oLgAw&usg=AFQjCNFp_XLVpCcSRq0FNVgwqkXcgj6qwQ&sig2=G01PwRTNy03hlzOzrf0CcA&bvm=bv.57155469,d.cGU&cad=rja
Posted by DAR 11/29/2013
It seems to be common sense that competition from unbranded gasoline sold by independent companies at low prices will cause lower prices in a market. Scholars have long since noticed the point. A California law journal study says:
"The decrease in the number of independent unbranded retailers offers a competing explanation for increased prices. Independent stations typically compete on price with little non-price product differentiation. These stations are completely independent from the refiner in that the gasoline dealer owns the station, and sells "unbranded" gasoline that can be purchased from any supplier. The unbranded station typically competes with other stations by offering the lowest price gasoline. When these stations are replaced by branded integrated stations (or exit the market), price competition in the market may be softened, resulting in a higher equilibrium price."
Well, yes. And the presence of independent low-price competitors like Costco, Giant, and Liberty will not necessarily hurt major brand franchise retail dealers charged high prices by wholesale suppliers. For the franchise dealers it is the profit spread that counts -- the difference between wholesale and retail -- not the absolute price.
Local government policy should encourage competition, and facilitate low-priced unbranded competition. Competition will force all prices in the market to be lower. Government should not discourage competition through regulation that blocks or limits competitors like Costco, Giant, and Liberty. (In DC, the regulation in issue concerning Costco is whether Costco can sell alcohol in its retail store and gasoline from its adjoining service station.) The government should do just the opposite – encourage competition. Competition is an idea that local legislators should support, even if competition is something large and influential wholesalers resent.
The scholarly article I cited is called “Vertical Relationships and Competition in Retail
Gasoline Markets, Empirical Evidence from Contract Changes in Southern California,” by Justine S. Hastings, Yale University, and can be found at http://www.google.com/url?sa=t&rct=j&q=&esrc=s&source=web&cd=2&ved=0CDgQFjAB&url=http%3A%2F%2Fwww.econ.yale.edu%2F~jh529%2Fpapers%2FHastings_Final_March2004.pdf&ei=FG6ZUo3tCo_1oASr8oLgAw&usg=AFQjCNFp_XLVpCcSRq0FNVgwqkXcgj6qwQ&sig2=G01PwRTNy03hlzOzrf0CcA&bvm=bv.57155469,d.cGU&cad=rja
Posted by DAR 11/29/2013
AAA takes position on government mandated ethanol levels
The AAA has asked EPA to lowering the amount of ethanol required to be blended into gasoline for 2014. According to an article in NPN.com, AAA's position is that a lower level would protect drivers by preventing a possible surge in gas prices or the increased use of potentially damaging E15 gasoline. It urged the Environmental Protection Agency (EPA) and the Obama administration to make those changes. “It is just not possible to blend the amount of ethanol required by current law given recent declines in fuel consumption, and it is time for public policy to acknowledge this reality,” Bob Darbelnet, president and chief executive officer of AAA, said in a statement posted on the association’s website. “The EPA should lower ethanol targets immediately as part of the proposed 2014 RFS rule to support consumers and promote alternative fuels.” Reports indicate the EPA has recommended a cut in the RFS biofuel mandate for 2014 to 15.21 billion gallons from 18.15 billion gallons, which would represent about 9.33 percent of expected gasoline sales next year, according to the association’s statement. This proposal would prevent the market from hitting a “blend wall” that would either result in higher gas prices or necessitate the increased use of E15 and E85 gasoline, the association said. AAA said it would expect negative consumer consequences were ethanol requirements to exceed ten percent of expected gasoline sales given that most cars can only use E10 gasoline, which contains 10 percent ethanol. “Corn-based ethanol can support the economy and reduce our reliance on fossil fuels,” Darbelnet said. “It is great news to hear that the EPA is considering a RFS proposal that would support this home-grown alternative while acknowledging the inability to achieve an outdated mandate.” A recently circulated document indicates that the EPA has proposed reducing the amount of ethanol that must be blended into gasoline in 2014, AAA said.
The entire NPN article, posted in Novermber, 2013, is at http://www.npnweb.com/ME2/dirmod.asp?sid=901D2CC3506F4C1187DF5BE4A8A2C0FF&nm=News&&mod=PublishingTitles&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=D1B47B31DA7D42F3A52BD01B0536E873
The AAA has asked EPA to lowering the amount of ethanol required to be blended into gasoline for 2014. According to an article in NPN.com, AAA's position is that a lower level would protect drivers by preventing a possible surge in gas prices or the increased use of potentially damaging E15 gasoline. It urged the Environmental Protection Agency (EPA) and the Obama administration to make those changes. “It is just not possible to blend the amount of ethanol required by current law given recent declines in fuel consumption, and it is time for public policy to acknowledge this reality,” Bob Darbelnet, president and chief executive officer of AAA, said in a statement posted on the association’s website. “The EPA should lower ethanol targets immediately as part of the proposed 2014 RFS rule to support consumers and promote alternative fuels.” Reports indicate the EPA has recommended a cut in the RFS biofuel mandate for 2014 to 15.21 billion gallons from 18.15 billion gallons, which would represent about 9.33 percent of expected gasoline sales next year, according to the association’s statement. This proposal would prevent the market from hitting a “blend wall” that would either result in higher gas prices or necessitate the increased use of E15 and E85 gasoline, the association said. AAA said it would expect negative consumer consequences were ethanol requirements to exceed ten percent of expected gasoline sales given that most cars can only use E10 gasoline, which contains 10 percent ethanol. “Corn-based ethanol can support the economy and reduce our reliance on fossil fuels,” Darbelnet said. “It is great news to hear that the EPA is considering a RFS proposal that would support this home-grown alternative while acknowledging the inability to achieve an outdated mandate.” A recently circulated document indicates that the EPA has proposed reducing the amount of ethanol that must be blended into gasoline in 2014, AAA said.
The entire NPN article, posted in Novermber, 2013, is at http://www.npnweb.com/ME2/dirmod.asp?sid=901D2CC3506F4C1187DF5BE4A8A2C0FF&nm=News&&mod=PublishingTitles&mid=8F3A7027421841978F18BE895F87F791&tier=4&id=D1B47B31DA7D42F3A52BD01B0536E873
More recent developments in local District of Columbia gasoline distribution litigation brought by the AG against ExxonMobil and its DC Distributors
As we've discussed, the DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
A lot has happened in the litigation. ExxonMobil has moved to dismiss the AG's Complaint, and so have the local Exxon distributors.
ExxonMobil argues that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argue, among other things, that the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.
The Attorney General has filed opposition papers arguing a right to sue and prevent competitive harm to dealers and the consuming public, and Defendants have filed further replies.
The Court paper are conveniently available on the internet as follows:
DC AG Complaint 8-27-13: http://www.scribd.com/doc/187329422/DC-AG-Complaint-8-27-13
Exxon Motion to Dismiss(1): http://www.scribd.com/doc/187330207/Exxon-Motion-to-Dismiss-1
Exxon MPA Exhibits Including Memo and Proposed Order(2): http://www.scribd.com/doc/187330649/Exxon-MPA-Exhibits-Prop-Order-2
Local distributor Anacostia et al Motion to Dismiss: http://www.scribd.com/doc/187330960/Anacostia-et-al-Motion-to-Dismiss-3
Anacostia et al MPA Exhibits Including Memo and Proposed Order for Motion to Dismiss (4): http://www.scribd.com/doc/187331562/Anacostia-et-al-MPA-Exhibits-Order-for-Motion-to-Dismiss-4
DC AG's Opposition To Motion to Dismiss (Redacted) (5): http://www.scribd.com/doc/187332082/Opp-Mpa-Redacted-5
Exxon Consent Motion File Reply (6): http://www.scribd.com/doc/187365875/Exxon-Consent-Motion-File-Reply-6
Exxon Reply Brief MTD (7) re DC : http://www.scribd.com/doc/187332898/Exxon-Reply-Brief-MTD-7
Anacostia et al Consent Motion To File Reply (8): http://www.scribd.com/doc/187333422/Anacostia-et-al-Consent-Motion-File-Reply-8
Amacostia et al Reply Brief MTD (9): http://www.scribd.com/doc/187334936/Amacostia-et-al-Reply-Brief-MTD-9
Posted 11-26-13 DAR
As we've discussed, the DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
A lot has happened in the litigation. ExxonMobil has moved to dismiss the AG's Complaint, and so have the local Exxon distributors.
ExxonMobil argues that the AG's case should be dismissed for three principal reasons:
(1) the Attorney General does not have standing or the authority to bring its claim under the Retail Service Station Act, D.C. Code §§ 36-301.01 et seq. (the “RSSA”);
(2) the Attorney General’s complaint fails to state a claim against ExxonMobil because ExxonMobil is not a “distributor” under the RSSA; and
(3) ExxonMobil’s agreements are not the type of agreements the RSSA covers because they are neither marketing agreements with a retail dealer nor exclusive. (That part about lack of exclusivity seems to mean that the agreement language does not require exclusivity, which may not address the question of whether Defendants actually practice exclusivity.)
ExxonMobil views the Complaint's relationship to antitrust harms as supporting dismissal: "This lawsuit comes on the heels of a failed two-year long antitrust investigation instigated by the D.C. Council and commenced by the Attorney General in 2011 to allegedly address perceived concerns about rising gasoline prices in the District."
Exxon distributor Anacostia and related local Defendants argue, among other things, that the Complaint should be dismissed because the RSSA entrusts enforcement of the statutory provision at issue solely to the service station dealers whose interests the Act is designed to protect. Also, the Attorney General does not have enforcement authority to protect the public interest using a so-called “parens patriae” action -- action on behalf of the citizens of the District. So, the argument is that the Attorney General lacks "standing" to bring suit.
The Attorney General has filed opposition papers arguing a right to sue and prevent competitive harm to dealers and the consuming public, and Defendants have filed further replies.
The Court paper are conveniently available on the internet as follows:
DC AG Complaint 8-27-13: http://www.scribd.com/doc/187329422/DC-AG-Complaint-8-27-13
Exxon Motion to Dismiss(1): http://www.scribd.com/doc/187330207/Exxon-Motion-to-Dismiss-1
Exxon MPA Exhibits Including Memo and Proposed Order(2): http://www.scribd.com/doc/187330649/Exxon-MPA-Exhibits-Prop-Order-2
Local distributor Anacostia et al Motion to Dismiss: http://www.scribd.com/doc/187330960/Anacostia-et-al-Motion-to-Dismiss-3
Anacostia et al MPA Exhibits Including Memo and Proposed Order for Motion to Dismiss (4): http://www.scribd.com/doc/187331562/Anacostia-et-al-MPA-Exhibits-Order-for-Motion-to-Dismiss-4
DC AG's Opposition To Motion to Dismiss (Redacted) (5): http://www.scribd.com/doc/187332082/Opp-Mpa-Redacted-5
Exxon Consent Motion File Reply (6): http://www.scribd.com/doc/187365875/Exxon-Consent-Motion-File-Reply-6
Exxon Reply Brief MTD (7) re DC : http://www.scribd.com/doc/187332898/Exxon-Reply-Brief-MTD-7
Anacostia et al Consent Motion To File Reply (8): http://www.scribd.com/doc/187333422/Anacostia-et-al-Consent-Motion-File-Reply-8
Amacostia et al Reply Brief MTD (9): http://www.scribd.com/doc/187334936/Amacostia-et-al-Reply-Brief-MTD-9
Posted 11-26-13 DAR
NY Times: Oil prices drop but retail gasoline prices may not
The November 25 New York Times reports that "Oil prices dipped and stocks around the world rose on Monday after the news of an agreement to temporarily freeze Iran’s nuclear program, but few specialists expected any significant change to consumer energy prices, at least in the short term."
Also,"Gregg Laskoski, an analyst at GasBuddy.com, a website that tells motorists where to find the least expensive gasoline in the United States and Canada, said the Iran deal 'may bring some calm to markets,' but he expressed doubt that it would have a significant impact soon."
The full article is at http://www.nytimes.com/2013/11/26/business/international/oil-prices-dip-after-nuclear-deal-with-iran.html?ref=gasolineprices&_r=0
The November 25 New York Times reports that "Oil prices dipped and stocks around the world rose on Monday after the news of an agreement to temporarily freeze Iran’s nuclear program, but few specialists expected any significant change to consumer energy prices, at least in the short term."
Also,"Gregg Laskoski, an analyst at GasBuddy.com, a website that tells motorists where to find the least expensive gasoline in the United States and Canada, said the Iran deal 'may bring some calm to markets,' but he expressed doubt that it would have a significant impact soon."
The full article is at http://www.nytimes.com/2013/11/26/business/international/oil-prices-dip-after-nuclear-deal-with-iran.html?ref=gasolineprices&_r=0
The idea of "redlining"
Court filings of the D.C. Attorney General reflect that particular neighborhoods in the District of Columbia are particularly affected by zone and redlining practices, and suffer particularly high prices, enforced by practices that preclude station owners from shopping for less expensive wholesale gasoline. Consequently, a neighborhood subject to zoning and redlining practices may have particularly high wholesale and retail high prices. Neighborhoods throughout the country may experience similar price variations.
As explained in a Federal Trade Commission working paper written some years ago:
[Refiners use] zone pricing for wholesale sale of gasoline to retail stations and territorial restraints on independent distributors (jobbers) that deliver gasoline to other retail stations. These territorial restraints are called “redlining” by opponents of the practice. . . . Regarding redlining, the Petroleum Marketers Association of America (2003) wrote that the “obvious effect of redlining is to reduce the number of [wholesale] competitors and, hence, the level of competition . . . .”
Concerning use of the practices by wholesalers (jobbers) the FTC authors explained:
Jobbers own and operate some of the stations that they supply, and may also own stations that they lease to dealers. Jobbers often represent more than one brand of gasoline, and often own or lease multiple stations. On occasion, jobbers also use price zones.
See www.ftc.gov/be/workpapers/wp271.pdf
Court filings of the D.C. Attorney General reflect that particular neighborhoods in the District of Columbia are particularly affected by zone and redlining practices, and suffer particularly high prices, enforced by practices that preclude station owners from shopping for less expensive wholesale gasoline. Consequently, a neighborhood subject to zoning and redlining practices may have particularly high wholesale and retail high prices. Neighborhoods throughout the country may experience similar price variations.
As explained in a Federal Trade Commission working paper written some years ago:
[Refiners use] zone pricing for wholesale sale of gasoline to retail stations and territorial restraints on independent distributors (jobbers) that deliver gasoline to other retail stations. These territorial restraints are called “redlining” by opponents of the practice. . . . Regarding redlining, the Petroleum Marketers Association of America (2003) wrote that the “obvious effect of redlining is to reduce the number of [wholesale] competitors and, hence, the level of competition . . . .”
Concerning use of the practices by wholesalers (jobbers) the FTC authors explained:
Jobbers own and operate some of the stations that they supply, and may also own stations that they lease to dealers. Jobbers often represent more than one brand of gasoline, and often own or lease multiple stations. On occasion, jobbers also use price zones.
See www.ftc.gov/be/workpapers/wp271.pdf
As of November 14, USA Today says gasoline prices may be bottoming out
From USA Today: After plummeting to their lowest levels in nearly three years, gasoline prices may be close to hitting a 2013 low. But that's probably about as low as they'll go this year, experts say.
Nationally, the average price for gasoline has inched up to $3.20 a gallon after bottoming at about $3.17 earlier this week. Behind the gains is a three-day spike in wholesale prices, including a 5% jump Thursday.
From USA Today: After plummeting to their lowest levels in nearly three years, gasoline prices may be close to hitting a 2013 low. But that's probably about as low as they'll go this year, experts say.
Nationally, the average price for gasoline has inched up to $3.20 a gallon after bottoming at about $3.17 earlier this week. Behind the gains is a three-day spike in wholesale prices, including a 5% jump Thursday.
BP and ARCO franchisees in California litigating alleged BP sales at low prices to non-franchisee competitors
Law360 reports (October 31, 2013) that a local California court refused to dismiss franchisee litigation charging that BP West Cost Products priced gasoline to rival gas stations at the expense of its own franchisees. Plaintiffs are owners of BP- and Atlantic Richfield Co.-branded gas stations required to purchase ARCO-brand gasoline. Their claim is under California's unfair business practices law. They allege that BP West Coast Products charged Safeway and Costco less than BP and ARCO franchisees.
“Plaintiffs' allegations are sufficient to state they were in actual competition with more favored buyers and that they suffered injury as a result of these practices,” the ruling judge said.
“BP operates as the proverbial '800-pound gorilla,' squashing its own franchisees in the naked pursuit of its own profits,” one group of franchisees alleged in a complaint.
The lead case is Hoskin Hogan et al. v. BP West Coast Products LLC et al., case number BC460880, in the Superior Court of the State of California, County of Los Angeles.
The Law360 report is at http://www.law360.com/competition/articles/485418?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
Law360 reports (October 31, 2013) that a local California court refused to dismiss franchisee litigation charging that BP West Cost Products priced gasoline to rival gas stations at the expense of its own franchisees. Plaintiffs are owners of BP- and Atlantic Richfield Co.-branded gas stations required to purchase ARCO-brand gasoline. Their claim is under California's unfair business practices law. They allege that BP West Coast Products charged Safeway and Costco less than BP and ARCO franchisees.
“Plaintiffs' allegations are sufficient to state they were in actual competition with more favored buyers and that they suffered injury as a result of these practices,” the ruling judge said.
“BP operates as the proverbial '800-pound gorilla,' squashing its own franchisees in the naked pursuit of its own profits,” one group of franchisees alleged in a complaint.
The lead case is Hoskin Hogan et al. v. BP West Coast Products LLC et al., case number BC460880, in the Superior Court of the State of California, County of Los Angeles.
The Law360 report is at http://www.law360.com/competition/articles/485418?nl_pk=c8faf85d-e0ef-4454-8b63-23033da4e00a&utm_source=newsletter&utm_medium=email&utm_campaign=competition
Lower retail gas prices may be too good to be true; stockpiles down
US crude oil stockpiles advanced by 1.577 million barrels during the first week of November, but gasoline inventories dropped by 3.755 million barrels. The source is a report released by the official Energy Information Administration (EIA).
The EIA report shows that oil consumption in the US increased by 4.1 million barrels to 383.9 million in the week ended October 25, rising to its highest level since June.
The American Petroleum Institute reported similar data. US crude inventories advanced by 870,000 barrels during the first week of November while a drop of 4.3 million barrels was seen in gasoline stockpiles.
See http://online.wsj.com/article/BT-CO-20131106-710398.html?dsk=y
US crude oil stockpiles advanced by 1.577 million barrels during the first week of November, but gasoline inventories dropped by 3.755 million barrels. The source is a report released by the official Energy Information Administration (EIA).
The EIA report shows that oil consumption in the US increased by 4.1 million barrels to 383.9 million in the week ended October 25, rising to its highest level since June.
The American Petroleum Institute reported similar data. US crude inventories advanced by 870,000 barrels during the first week of November while a drop of 4.3 million barrels was seen in gasoline stockpiles.
See http://online.wsj.com/article/BT-CO-20131106-710398.html?dsk=y
Bloomberg reports lower gasoline prices in US, less US reliance on European benchmarks
According to Bloomberg, as of early November the average price of gasoline at the pump for U.S. drivers fell to the lowest level of the year as wide spreads between U.S. and European oil benchmarks have driven American refiners to produce more fuel than ever for this time of year.
Bloomberg reports that the average retail price fell 2.9 cents to $3.265 a gallon in the week ended November 4, the lowest level since Dec. 4, the Energy Information Administration reported on its website. Prices are 22.7 cents below a year earlier.
U.S. refineries produced 9.434 million barrels a day of gasoline the week of Oct. 25, the highest seasonal level in weekly EIA data going back to 1982. The discount of Light Louisiana Sweet, the U.S. Gulf benchmark crude, to European Brent, the internatonal benchmark, averaged $6.54 a barrel in October, the widest on record, according to data compiled by Bloomberg.
Full article: http://www.bloomberg.com/news/2013-11-04/average-retail-gasoline-in-u-s-falls-to-lowest-price-this-year.html
According to Bloomberg, as of early November the average price of gasoline at the pump for U.S. drivers fell to the lowest level of the year as wide spreads between U.S. and European oil benchmarks have driven American refiners to produce more fuel than ever for this time of year.
Bloomberg reports that the average retail price fell 2.9 cents to $3.265 a gallon in the week ended November 4, the lowest level since Dec. 4, the Energy Information Administration reported on its website. Prices are 22.7 cents below a year earlier.
U.S. refineries produced 9.434 million barrels a day of gasoline the week of Oct. 25, the highest seasonal level in weekly EIA data going back to 1982. The discount of Light Louisiana Sweet, the U.S. Gulf benchmark crude, to European Brent, the internatonal benchmark, averaged $6.54 a barrel in October, the widest on record, according to data compiled by Bloomberg.
Full article: http://www.bloomberg.com/news/2013-11-04/average-retail-gasoline-in-u-s-falls-to-lowest-price-this-year.html
USA Today reports unusually volatile retail gasoline prices
A November 2, 2013 report says that retail price jumps of 20 cents per gallon or more in a single day are becoming more common, based on an AP analysis of daily and weekly price changes at 120,000 U.S. gasoline stations tracked by GasBuddy.com. Sixty-three times this year ,at least one U.S. metro area has seen such a change. According to the USA Today article, analysts say the cause is a fuel system increasingly vulnerable to short-term shocks. That's because refiners try to keep stocks of gasoline low to save money.
The complete article is at http://www.usatoday.com/story/money/business/2013/11/02/volatile-prices-at-gas-pumps-give-drivers-whiplash/3380325/.
A November 2, 2013 report says that retail price jumps of 20 cents per gallon or more in a single day are becoming more common, based on an AP analysis of daily and weekly price changes at 120,000 U.S. gasoline stations tracked by GasBuddy.com. Sixty-three times this year ,at least one U.S. metro area has seen such a change. According to the USA Today article, analysts say the cause is a fuel system increasingly vulnerable to short-term shocks. That's because refiners try to keep stocks of gasoline low to save money.
The complete article is at http://www.usatoday.com/story/money/business/2013/11/02/volatile-prices-at-gas-pumps-give-drivers-whiplash/3380325/.
U.S. Energy Information Agency shows crude and spot prices for gasoline are down; retail not so much
Wholesale Spot Petroleum Prices, 10/31/13 Close
Product Area Price Percent Change*
Gasoline (RBOB)
($/gallon) NY Harbor 2.60 -2.0
Gulf Coast 2.43 -1.4
Los Angeles 2.70 -0.8
Retail Petroleum Prices (AAA), 10/31/13 ($/gallon)
Regular Gasoline
US Average 3.28 -0.1
From http://www.eia.gov/todayinenergy/prices.cfm
Wholesale Spot Petroleum Prices, 10/31/13 Close
Product Area Price Percent Change*
Gasoline (RBOB)
($/gallon) NY Harbor 2.60 -2.0
Gulf Coast 2.43 -1.4
Los Angeles 2.70 -0.8
Retail Petroleum Prices (AAA), 10/31/13 ($/gallon)
Regular Gasoline
US Average 3.28 -0.1
From http://www.eia.gov/todayinenergy/prices.cfm
Vanishing urban gas stations
The barriers to entry of new wholesale and retail gasoline businesses into urban areas is high, which can be good news for incumbents with a strong market position who want to sell gasoline at high prices. The trend is in the opposite direction, with gas station locations in urban areas being bought up by developers. That too is good news for urban gas station land owners who would like to sell their real estate for high prices. The consequences for franchise station owners who lease their station properties aren't so good, nor are the consequences for retail customers.
The New York Times has data for New York City at http://www.nytimes.com/2013/10/23/realestate/commercial/manhattans-vanishing-gas-stations.html
"In October, there were 117 stations in Manhattan, down from 207 in 2004, or a 44 percent decrease, according to the city’s Bureau of Fire Prevention. The city as a whole has 35 percent fewer stations than it did a decade ago, according to the data."
As a result, Manhattan seems comparatively underserved. Its 117 stations represent about 9 percent of the New York total, similar to Staten Island, which has less than a third of Manhattan’s population.
Posted 10/23/2013 DAR
The barriers to entry of new wholesale and retail gasoline businesses into urban areas is high, which can be good news for incumbents with a strong market position who want to sell gasoline at high prices. The trend is in the opposite direction, with gas station locations in urban areas being bought up by developers. That too is good news for urban gas station land owners who would like to sell their real estate for high prices. The consequences for franchise station owners who lease their station properties aren't so good, nor are the consequences for retail customers.
The New York Times has data for New York City at http://www.nytimes.com/2013/10/23/realestate/commercial/manhattans-vanishing-gas-stations.html
"In October, there were 117 stations in Manhattan, down from 207 in 2004, or a 44 percent decrease, according to the city’s Bureau of Fire Prevention. The city as a whole has 35 percent fewer stations than it did a decade ago, according to the data."
As a result, Manhattan seems comparatively underserved. Its 117 stations represent about 9 percent of the New York total, similar to Staten Island, which has less than a third of Manhattan’s population.
Posted 10/23/2013 DAR
Low gas prices at the Giant (Ahold) in MD; higher prices at major brand gas stations in DC
As of October 18, 2013, internet reports show the price of regular gasoline at the Giant Foods (ahold) 8500 Connecticut Ave, Chevy Chase,MD 20815 is $3.429. Citgo, across the street at 8505 Connecticut Ave. is $3.589.
Some miles away, in or near Chevy Chase, D.C., Shell at 4900 Wisconsin Ave Nw, Washington, DC 20016 is at $3.709. BP at 5001 Connecticut Ave Nw, Washington, DC 20008 is at $3.739. Shell lat 4940 Connecticut Ave Nw, Washington, DC 20008 is at $3.699. Exxon at 5521 Connecticut Ave Nw, Washington, DC 20015 is at $3.789.
Assuming that the internet reporting is accurate, prices appear to be higher in parts of D.C., including in or near Chevy Chase, D.C., some miles from Chevy Chase Maryland, while prices are lower in Chevy Chase, Maryland.
Is the reason taxes? In Maryland, a bill signed by Governor O'Malley increased the gas tax 4 cents per gallon this year, to 27.5 cents per gallon. The tax will increase to 43.5 cents per gallon when fully implemented in 2016.
Data offered at Priuschat.com suggests that Maryland taxes are higher than in D.C.
If Priuschat is right, taxes can’t be the explanation for relatively low prices in Chevy Chase, MD.
Could it be that prices are higher at the stations in D.C. because they are offering major brands Exxon, Shell, and BP, and prices are lower at Maryland stations because they are offering offering less popular brands Giant (Ahold) and Citgo? If branding is the explanation, then is there a quality or consumer preference difference that explains the price differences?
If Giant (Ahold), Citgo, or other lesser brand gasolines are similar in quality to Shell, BP, or Exxon gasoline, and consumers believe that, then consumers who have these lesser brand stations available would probably want to use them. But retail gasoline is a neighborhood business. Drivers will often shop in their neighborhoods, and pay extra to do it. So, for many consumers choice of the lower price lesser brand stations may be limited. A station miles away may often be too far.
It may be that the explanation for the higher prices in D.C. is the one offered in the litigation brought by the Attorney General for the District of Columbia against ExxonMobil and others, and discussed elsewhere in this newsletter.
Posted DAR 10/18/2013
As of October 18, 2013, internet reports show the price of regular gasoline at the Giant Foods (ahold) 8500 Connecticut Ave, Chevy Chase,MD 20815 is $3.429. Citgo, across the street at 8505 Connecticut Ave. is $3.589.
Some miles away, in or near Chevy Chase, D.C., Shell at 4900 Wisconsin Ave Nw, Washington, DC 20016 is at $3.709. BP at 5001 Connecticut Ave Nw, Washington, DC 20008 is at $3.739. Shell lat 4940 Connecticut Ave Nw, Washington, DC 20008 is at $3.699. Exxon at 5521 Connecticut Ave Nw, Washington, DC 20015 is at $3.789.
Assuming that the internet reporting is accurate, prices appear to be higher in parts of D.C., including in or near Chevy Chase, D.C., some miles from Chevy Chase Maryland, while prices are lower in Chevy Chase, Maryland.
Is the reason taxes? In Maryland, a bill signed by Governor O'Malley increased the gas tax 4 cents per gallon this year, to 27.5 cents per gallon. The tax will increase to 43.5 cents per gallon when fully implemented in 2016.
Data offered at Priuschat.com suggests that Maryland taxes are higher than in D.C.
If Priuschat is right, taxes can’t be the explanation for relatively low prices in Chevy Chase, MD.
Could it be that prices are higher at the stations in D.C. because they are offering major brands Exxon, Shell, and BP, and prices are lower at Maryland stations because they are offering offering less popular brands Giant (Ahold) and Citgo? If branding is the explanation, then is there a quality or consumer preference difference that explains the price differences?
If Giant (Ahold), Citgo, or other lesser brand gasolines are similar in quality to Shell, BP, or Exxon gasoline, and consumers believe that, then consumers who have these lesser brand stations available would probably want to use them. But retail gasoline is a neighborhood business. Drivers will often shop in their neighborhoods, and pay extra to do it. So, for many consumers choice of the lower price lesser brand stations may be limited. A station miles away may often be too far.
It may be that the explanation for the higher prices in D.C. is the one offered in the litigation brought by the Attorney General for the District of Columbia against ExxonMobil and others, and discussed elsewhere in this newsletter.
Posted DAR 10/18/2013
DC Attorney General Irvin Nathan rebuts Washington Post editorial opposing the DC suit against ExxonMobil and a local distributor
In what I consider to be an excellent letter published by the Washington Post on September 6, Attorney General Irvin Nathan rebutted the Washington Post's editorial criticizing the AG's suit against ExonMobil and local distributors. The letter is at http://www.washingtonpost.com/opinions/exclusive-supply-agreements-for-fuel-drive-prices-in-the-district/2013/09/06/7f164ce2-1591-11e3-961c-f22d3aaf19ab_story.html
The main point of the AG's letter is straightforward. While vertical arrangements may often be benign, market facts matter. Mr. Nathan explains: "Vertically imposed supply restrictions, while perhaps 'benign' in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one. The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations."
Washington Post 9-3-2013 editorial opposing the DC AG's suit against Exxon and local distributors.
The 9-3-2013 Washington Post includes an editorial opposing the DC AG's suit against Exxon and local distributors. See http://www.washingtonpost.com/opinions/dc-gas-prices-dont-call-for-a-lawsuit/2013/09/02/7b8504a0-11af-11e3-b4cb-fd7ce041d814_story.html
Here is a letter to the editor, which as of this posting has not been accepted by the Washington Post newspaper:
Editors:
The Washington Post editorial board is wrong when it argues against Washington D.C. Attorney General Irvin B. Nathan's filing a lawsuit in D.C. Superior Court seeking to overturn gasoline supply contracts that require station owners to purchase fuel exclusively from a particular supplier. Mr. Nathan is right when he says that allowing station owners to shop around for the lowest price will “increase wholesale competition, and bring down retail prices at the pump.”
The D.C. Attorney General’s Complaint uses a special local statute to accomplish what should be viewed as an important antitrust goal that will lower prices and help consumers. The goal is to stop exclusive supply arrangements forced on station owners by a dominant local gasoline distributor, with large oil company backing. The Washington Post editors may feel that exclusive dealing practices enforced by a distributor with great market power do not cause high prices and money damages to dealers and gasoline users, but D.C. residents know better. Both groups have suffered price overcharges that will stop if the Attorney General gets the injunctive relief he seeks from the Court.
Facts make a difference to application of legal theory. Gasoline prices are higher in D.C. than elsewhere, although there are some "zone" variations from neighborhood to neighborhood. The D.C. distributor with a special relationship to big oil effectively controls 75% or more of wholesale and retail gasoline sales in DC. Those are propositions of fact that are subject to proofs. In an unhealthy market situation that lacks distributor competition, the lock-in of dealers to the dominant supplier really does cause prices to be higher to dealers and consumers. As Mr. Nathan explained, it is likely that wholesale and retail prices would be lower if station owners were not locked into a particular distributor, but were free to shop among distributors for the lowest price. That harmful lock-in distribution practices may have become commonplace is not a justification.
The proper role of the Attorney General is to protect the interests of consumers and the gas station owners, not a gasoline distributor who effectively controls most gasoline sales in the District, and big oil companies that provides back up and enforcement. That is the side the Washington Post should be on.
Don Resnikoff
Law Offices of Don Resnikoff
5335 Wisconsin Avenue, NW
Suite 440
Washington, DC 20015
donresnikoff@donresnikofflaw.com
202-344-0089
* * * * * * * * * *
More recent developments in local District of Columbia gasoline pricing:
District of Columbia Sues ExxonMobil and Its DC Distributors, Seeking to End Their Exclusive-Supply Agreements and Lower Retail Gasoline Prices
The DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
I am not neutral about the AG's taking action. I applaud it. I have argued publicly, as vehemently as I can, for attention to the effects of parallel exclusive dealing requirements of the locally dominant Mamo gasoline distributorships and the PMG distributorship, and direct retail activities of those companies. The enforcement concern is that the combination of locked-in station operators and dominant suppliers causes artificially high gasoline prices in DC, wholesale and resale.
The Attorney General's action should have nationwide significance, because there are strong indications of similar conduct in localities across the country. Some jurisdictions have local special statutes somewhat like DC, but in many jurisdictions any complaints, public or private, would rely on the antitrust laws.
The DC press release and a link to the DC Complaint are at http://oag.dc.gov/release/district-sues-exxonmobil-and-its-dc-distributors-seeking-end-their-exclusive-supply The press release also appears below:
WASHINGTON, D.C. – The District of Columbia filed a lawsuit against ExxonMobil Oil Corporation and its gasoline distributors for Washington, D.C., to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., Attorney General Irvin B. Nathan announced today. The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the District’s Retail Service Station Act.
The affiliated distributors – Capitol Petroleum Group, LLC, Anacostia Realty, LLC, and Springfield Petroleum Realty, LLC – are the exclusive gasoline suppliers for about 60% of the 107 gasoline stations in D.C., including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations, and 3 unbranded stations. The District’s lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in D.C., or about 25% of the gasoline stations in the city.
The exclusive-supply agreements, or earlier versions of them, were established by ExxonMobil and were transferred in 2009 to the affiliated distributors, along with ExxonMobil’s ownership of the 30 D.C. Exxon stations to which the agreements then pertained. According to the District’s complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.
The District alleges that the exclusive-supply agreements allow the affiliated distributors to “set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents . . . of the benefits of competition in the wholesale supply of Exxon-branded gasoline.”
“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said. “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”
Attachment(s): ExxonMobil Complaint431.23 KB
District of Columbia Sues ExxonMobil and Its DC Distributors, Seeking to End Their Exclusive-Supply Agreements and Lower Retail Gasoline Prices
The DC AG's Complaint, filed 8-27-13, uses a local statute to accomplish what may be viewed as an antitrust goal: stop an exclusive dealing arrangement with a dominant local gasoline distributor that results in artificially high prices, wholesale and retail.
I am not neutral about the AG's taking action. I applaud it. I have argued publicly, as vehemently as I can, for attention to the effects of parallel exclusive dealing requirements of the locally dominant Mamo gasoline distributorships and the PMG distributorship, and direct retail activities of those companies. The enforcement concern is that the combination of locked-in station operators and dominant suppliers causes artificially high gasoline prices in DC, wholesale and resale.
The Attorney General's action should have nationwide significance, because there are strong indications of similar conduct in localities across the country. Some jurisdictions have local special statutes somewhat like DC, but in many jurisdictions any complaints, public or private, would rely on the antitrust laws.
The DC press release and a link to the DC Complaint are at http://oag.dc.gov/release/district-sues-exxonmobil-and-its-dc-distributors-seeking-end-their-exclusive-supply The press release also appears below:
WASHINGTON, D.C. – The District of Columbia filed a lawsuit against ExxonMobil Oil Corporation and its gasoline distributors for Washington, D.C., to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., Attorney General Irvin B. Nathan announced today. The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the District’s Retail Service Station Act.
The affiliated distributors – Capitol Petroleum Group, LLC, Anacostia Realty, LLC, and Springfield Petroleum Realty, LLC – are the exclusive gasoline suppliers for about 60% of the 107 gasoline stations in D.C., including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations, and 3 unbranded stations. The District’s lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in D.C., or about 25% of the gasoline stations in the city.
The exclusive-supply agreements, or earlier versions of them, were established by ExxonMobil and were transferred in 2009 to the affiliated distributors, along with ExxonMobil’s ownership of the 30 D.C. Exxon stations to which the agreements then pertained. According to the District’s complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.
The District alleges that the exclusive-supply agreements allow the affiliated distributors to “set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents . . . of the benefits of competition in the wholesale supply of Exxon-branded gasoline.”
“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said. “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”
Attachment(s): ExxonMobil Complaint431.23 KB
Recent developments in D.C. local gasoline pricing
The office of the Attorney General for the District of Columbia filed an amicus brief In Court supporting the right of gasoline station operators to shop for the cheapest wholesale gasoline prices, rather than being locked into exclusive dealing requirements by large wholesalers. BP, jobber-wholesaler PMG and some Plaintiffs' counsel argued that an earlier Court ruling establishing that right should be set aside. The AG opposed vacating the earlier decision of the Court. (Download a PDF of the brief by clicking below.)
| exxonmobil_-_districts_reply__final.docx |
The AG's position has prevailed, and a new Court Order has been entered preserving the earlier Court ruling precluding exclusive dealing. This is, of course, good news for gas station owners. Here is the new Court Order. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162751766/Court-Order-Refusing-to-Vacate
BP has appealed. The appeal reinforces the point that BP supports jobber PMG's efforts to prevent gasoline station owners from shopping for lower branded gasoline prices. Here are the appeal papers. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162740434/BP-appeal
http://www.scribd.com/doc/162751766/Court-Order-Refusing-to-Vacate
BP has appealed. The appeal reinforces the point that BP supports jobber PMG's efforts to prevent gasoline station owners from shopping for lower branded gasoline prices. Here are the appeal papers. (Download a PDF by clicking below.)
http://www.scribd.com/doc/162740434/BP-appeal
Oil prices up -- August, 2013 report
MARKET WATCH:
The September contract for benchmark US light, sweet crudes jumped $2.57 to $105.97/bbl Aug. 9 on the New York Mercantile Exchange. The October contract also made gains, up $2.29 to $105.16/bbl.
posted DAR 8/13/2013
MARKET WATCH:
The September contract for benchmark US light, sweet crudes jumped $2.57 to $105.97/bbl Aug. 9 on the New York Mercantile Exchange. The October contract also made gains, up $2.29 to $105.16/bbl.
posted DAR 8/13/2013
Price-fixing happens: Canadian defendants Found Guilty of Gasoline Price-fixing
Following investigation by the Competition Bureau and a trial before the Quebec Superior Court in Sherbrooke, Les Pétroles Global Inc. has been found guilty today for its role in a gasoline price-fixing conspiracy.
The Ontario company, accused in June 2008, was found guilty for conspiring to fix the price of retail gasoline in Victoriaville, Sherbrooke and Magog, Quebec. The trial for Les Pétroles Global Inc. took place from May 6 to 16, 2013. Individual representatives from the company pleaded guilty in September and October 2008, and in March 2009.
"This is another guilty verdict in this investigation and it sends a clear message that price-fixing activities will not be tolerated in Canada," said John Pecman, Commissioner of Competition. "Price-fixing and other types of anti-competitive conduct cheat Canadians out of their hard-earned money."
Thirty-nine individuals and 15 companies have now been charged with criminal price-fixing in this case.
On August 20 media reported that two gasoline dealers and an Irving Oil Corp. employee were fined a combined $45,000. According to the Canadian government, the conspiracy also involved gas stations in other markets, including Victoriaville and Thetford Mines.
Authorities said most of the gas retailers in those communities were part of a price-fixing cartel from 2004 and 2006, when they would call each other directly or through intermediaries to agree on how much they would charge motorists to fuel up.
Three additional organizations are among those charged — Gestion Marc-Yvan Letourneau Inc., the convenience store chain 134553 Canada Inc. and Societe Cooperative Agricole des Bois-Francs, a trade group for companies in the agriculture and petroleum industries.
-- posted by DAR 8/13/2013 and 8/20/2013
Following investigation by the Competition Bureau and a trial before the Quebec Superior Court in Sherbrooke, Les Pétroles Global Inc. has been found guilty today for its role in a gasoline price-fixing conspiracy.
The Ontario company, accused in June 2008, was found guilty for conspiring to fix the price of retail gasoline in Victoriaville, Sherbrooke and Magog, Quebec. The trial for Les Pétroles Global Inc. took place from May 6 to 16, 2013. Individual representatives from the company pleaded guilty in September and October 2008, and in March 2009.
"This is another guilty verdict in this investigation and it sends a clear message that price-fixing activities will not be tolerated in Canada," said John Pecman, Commissioner of Competition. "Price-fixing and other types of anti-competitive conduct cheat Canadians out of their hard-earned money."
Thirty-nine individuals and 15 companies have now been charged with criminal price-fixing in this case.
On August 20 media reported that two gasoline dealers and an Irving Oil Corp. employee were fined a combined $45,000. According to the Canadian government, the conspiracy also involved gas stations in other markets, including Victoriaville and Thetford Mines.
Authorities said most of the gas retailers in those communities were part of a price-fixing cartel from 2004 and 2006, when they would call each other directly or through intermediaries to agree on how much they would charge motorists to fuel up.
Three additional organizations are among those charged — Gestion Marc-Yvan Letourneau Inc., the convenience store chain 134553 Canada Inc. and Societe Cooperative Agricole des Bois-Francs, a trade group for companies in the agriculture and petroleum industries.
-- posted by DAR 8/13/2013 and 8/20/2013
Wholesale gasoline pricing in Maryland
Here are excerpts from an interesting article from 2011 that we came across recently. It presents the complaints of Frederick County MD area Exxon dealers about the pricing by jobbers who took over Exxon's distribution and pricing role in 2008. The story is remarkably similar to the stories we've heard in DC. We'll do follow-up to find out what has happened since. (If a reader has some insight, please let us know.)
Bethany Rodgers News-Post Staff | Posted: Saturday, May 14, 2011 12:00 am
"A band of area gas station dealers on Friday expressed frustration at a fuel supply system they say has some of them on the verge of bankruptcy even as they charge sky-high prices at the pump."
The dealers, all of whom operate Exxon stations in Frederick County, say part of the problem is their reliance on buying gasoline from intermediaries, whom they called "jobbers," instead of directly from their parent company.
"Now we have a middleman who is making his bucks," said Nisar Chaudhri, who owns a gas station on Monocacy Boulevard.
+++
Exxon started using a gasoline distributor in June 2008, and since then, the price fluctuations in have outstripped anything the dealers have ever seen.
The station owners said they are bound to buy from one distributor, Mid-Atlantic Convenience Stores, a company based in Richmond, Va. The company, MACS, sets the fuel prices and can decide when to fill the tanks at the 10 Exxon stations in Frederick County. If the station owners turn the fuel trucks away, they face a $500 penalty, the dealers said. "If somebody has control of all the Exxon stations in Maryland ... well of course there's no incentive for him to be aggressive with pricing. He's going to sit back and rake it in," Ray Emam (West Patrick Street Exxon) said. On Monday, the MACS supplier visited the Exxon stations and filled the underground tanks at a cost of
$4.07 per gallon, the dealers said. After accounting for credit card fees and overhead, the stationowners had to mark up their gas at prices well above those of their competitors just to break even, they said.
Elmer Wachter, who operates a station in Myersville, said before he started buying from the "jobber,"he sold about 270,000 gallons of gas per month. Now he's down to about 139,000 gallons, he said.
An MACS executive said the distribution company is also at the mercy of a volatile fuel market. "Increases and decreases in the pricing of gasoline are determined by the primary suppliers of gasoline who own the refineries," read a statement from Jim Summers, president and chief operating officer of MACS. "Overall our pricing reflects the market conditions, while we try to buffer our dealers and our consumers against upticks in pricing."
+++
Posted by DAR 7/20.2013. The full article is at http://m.fredericknewspost.com/archive/article_dfe5e370-8a15-5def-af83-dd29bcdb653b.html
An interesting companion YouTube posting is at http://www.youtube.com/watch?v=7zT_kBjXHd8
A footnote about Mid-Atlantic Convenience Stores (MACS)
In July of 2012 Convenience Store News reported about MACS:
Richmond, Va.-based Mid-Atlantic Convenience Stores (MACS), one of the largest convenience store networks and fuel distributors in the mid-Atlantic region, announced today a new retail branding strategy that positions MACS as the exclusive developer for the Circle K brand in four regions: Virginia, Maryland, Delaware and the District of Columbia.
Today, MACS is comprised of approximately 300 company-owned and dealer-operated retail locations throughout Maryland and Virginia, which until now have gone to market as various brands . . . .
Posted by DAR 7/24/2013 Full article at http://www.csdecisions.com/2012/07/11/breaking-news-macs-to-be-exclusive-circle-k-developer-in-mid-atlantic-region/
The dealers, all of whom operate Exxon stations in Frederick County, say part of the problem is their reliance on buying gasoline from intermediaries, whom they called "jobbers," instead of directly from their parent company.
"Now we have a middleman who is making his bucks," said Nisar Chaudhri, who owns a gas station on Monocacy Boulevard.
+++
Exxon started using a gasoline distributor in June 2008, and since then, the price fluctuations in have outstripped anything the dealers have ever seen.
The station owners said they are bound to buy from one distributor, Mid-Atlantic Convenience Stores, a company based in Richmond, Va. The company, MACS, sets the fuel prices and can decide when to fill the tanks at the 10 Exxon stations in Frederick County. If the station owners turn the fuel trucks away, they face a $500 penalty, the dealers said. "If somebody has control of all the Exxon stations in Maryland ... well of course there's no incentive for him to be aggressive with pricing. He's going to sit back and rake it in," Ray Emam (West Patrick Street Exxon) said. On Monday, the MACS supplier visited the Exxon stations and filled the underground tanks at a cost of
$4.07 per gallon, the dealers said. After accounting for credit card fees and overhead, the stationowners had to mark up their gas at prices well above those of their competitors just to break even, they said.
Elmer Wachter, who operates a station in Myersville, said before he started buying from the "jobber,"he sold about 270,000 gallons of gas per month. Now he's down to about 139,000 gallons, he said.
An MACS executive said the distribution company is also at the mercy of a volatile fuel market. "Increases and decreases in the pricing of gasoline are determined by the primary suppliers of gasoline who own the refineries," read a statement from Jim Summers, president and chief operating officer of MACS. "Overall our pricing reflects the market conditions, while we try to buffer our dealers and our consumers against upticks in pricing."
+++
Posted by DAR 7/20.2013. The full article is at http://m.fredericknewspost.com/archive/article_dfe5e370-8a15-5def-af83-dd29bcdb653b.html
An interesting companion YouTube posting is at http://www.youtube.com/watch?v=7zT_kBjXHd8
A footnote about Mid-Atlantic Convenience Stores (MACS)
In July of 2012 Convenience Store News reported about MACS:
Richmond, Va.-based Mid-Atlantic Convenience Stores (MACS), one of the largest convenience store networks and fuel distributors in the mid-Atlantic region, announced today a new retail branding strategy that positions MACS as the exclusive developer for the Circle K brand in four regions: Virginia, Maryland, Delaware and the District of Columbia.
Today, MACS is comprised of approximately 300 company-owned and dealer-operated retail locations throughout Maryland and Virginia, which until now have gone to market as various brands . . . .
Posted by DAR 7/24/2013 Full article at http://www.csdecisions.com/2012/07/11/breaking-news-macs-to-be-exclusive-circle-k-developer-in-mid-atlantic-region/
Some Advice From Habib Shah About Not Getting Stuck in a Supplier Contract
Here is part of Habib Shah's advice posted online:
Credit card sales going to the jobber mean, you are locked into the contract, regardless you have signed the Fuel supply agreement or not. This is another way jobbers lock the dealer with a brand. Once you have accepted the Credit Card Program, you are locked. Even if you are not satisfied with your jobber and you do not have any fuel supply agreement signed, still you are not able to buy gas from any other Exxon Jobber in the area, you have to have your brand changed to get out of this grid lock.
For more, see Mr. Shah's full postings at http://www.linkedin.com/groups/How-negotiate-best-fuel-contract-1091047.S.92248409
Posted by DR July 5, 2013
Here is part of Habib Shah's advice posted online:
Credit card sales going to the jobber mean, you are locked into the contract, regardless you have signed the Fuel supply agreement or not. This is another way jobbers lock the dealer with a brand. Once you have accepted the Credit Card Program, you are locked. Even if you are not satisfied with your jobber and you do not have any fuel supply agreement signed, still you are not able to buy gas from any other Exxon Jobber in the area, you have to have your brand changed to get out of this grid lock.
For more, see Mr. Shah's full postings at http://www.linkedin.com/groups/How-negotiate-best-fuel-contract-1091047.S.92248409
Posted by DR July 5, 2013
Gas Station POS Collection of ZIP Code Information May Violate Local Law: Implications for Online Retailers, Gas Stations
Excerpt from posting by Keller and Heckman Law Firm:
Since 2011, California has been the primary venue for suits alleging the illegality of collecting ZIP codes in connection with a credit card transaction. Based on a recent decision by the Supreme Judicial Court of Massachusetts, the State's highest court, more such lawsuits will likely be filed in Massachusetts and elsewhere. Indeed, two similar lawsuits have already been filed in Massachusetts. With similar statutes in place in nine other jurisdictions, other challenges to the collection of ZIP codes may soon follow.
The first decision addressing ZIP Codes was issued by the California Supreme Court in 2011. That court held in Pineda v. Williams-Sonoma Stores, Inc., that a ZIP code constitutes "personal identification information" for purposes of the Song-Beverly Credit Card Act ("Song-Beverly Act").[1] The Song-Beverly Act "prohibits businesses from requesting that cardholders provide ‘personal identification information' during credit card transactions, and then recording that information."[2]
On March 11, 2013, the Massachusetts Supreme Judicial Court issued a similar opinion in Tyler v. Michaels Stores, Inc., finding that under the Massachusetts statute ZIP codes alone constitute personal identification information when used in connection with a credit card transaction.[3] Because the Massachusetts statute is similar to laws in nine other jurisdictions, we anticipate that litigation against retailers that collect ZIP codes could expand significantly, and quickly. While no retail business is immune, businesses that may be at particular risk, and which have not previously been subject to these types of lawsuits, include retail motor fuel dispensers (gas stations) and e-commerce websites. A legislative strategy to clarify the scope of the ruling, as occurred in California after the Pineda decision, may be a component of a litigation-avoidance strategy.
Full posting at http://www.khlaw.com/showpublication.aspx?show=6261
Posted by DR 1/4/2013
Excerpt from posting by Keller and Heckman Law Firm:
Since 2011, California has been the primary venue for suits alleging the illegality of collecting ZIP codes in connection with a credit card transaction. Based on a recent decision by the Supreme Judicial Court of Massachusetts, the State's highest court, more such lawsuits will likely be filed in Massachusetts and elsewhere. Indeed, two similar lawsuits have already been filed in Massachusetts. With similar statutes in place in nine other jurisdictions, other challenges to the collection of ZIP codes may soon follow.
The first decision addressing ZIP Codes was issued by the California Supreme Court in 2011. That court held in Pineda v. Williams-Sonoma Stores, Inc., that a ZIP code constitutes "personal identification information" for purposes of the Song-Beverly Credit Card Act ("Song-Beverly Act").[1] The Song-Beverly Act "prohibits businesses from requesting that cardholders provide ‘personal identification information' during credit card transactions, and then recording that information."[2]
On March 11, 2013, the Massachusetts Supreme Judicial Court issued a similar opinion in Tyler v. Michaels Stores, Inc., finding that under the Massachusetts statute ZIP codes alone constitute personal identification information when used in connection with a credit card transaction.[3] Because the Massachusetts statute is similar to laws in nine other jurisdictions, we anticipate that litigation against retailers that collect ZIP codes could expand significantly, and quickly. While no retail business is immune, businesses that may be at particular risk, and which have not previously been subject to these types of lawsuits, include retail motor fuel dispensers (gas stations) and e-commerce websites. A legislative strategy to clarify the scope of the ruling, as occurred in California after the Pineda decision, may be a component of a litigation-avoidance strategy.
Full posting at http://www.khlaw.com/showpublication.aspx?show=6261
Posted by DR 1/4/2013
FTC investigates major oil firm price fixing
Excerpt from Bloomberg rticle By Sara Forden - Jun 25, 2013 12:01 AM ET
The U.S. Federal Trade Commission opened a formal investigation into how prices of crude oil and petroleum-derived products are set, mirroring a European Union inquiry, two people familiar with the matter said.
The investigation, now in a preliminary stage, will probably broaden into a multi-jurisdictional affair like the inquiry into manipulation of the London interbank offered rate, or Libor, the people said. FTC investigators are reviewing the progress made by their European counterparts, the people said, asking not to be identified because the matter is confidential.
The FTC, which routinely monitors wholesale and retail gasoline prices in the U.S. to look for anticompetitive behavior, agreed with the Justice Department’s antitrust division to handle the probe, said the people.
Excerpt from Bloomberg rticle By Sara Forden - Jun 25, 2013 12:01 AM ET
The U.S. Federal Trade Commission opened a formal investigation into how prices of crude oil and petroleum-derived products are set, mirroring a European Union inquiry, two people familiar with the matter said.
The investigation, now in a preliminary stage, will probably broaden into a multi-jurisdictional affair like the inquiry into manipulation of the London interbank offered rate, or Libor, the people said. FTC investigators are reviewing the progress made by their European counterparts, the people said, asking not to be identified because the matter is confidential.
The FTC, which routinely monitors wholesale and retail gasoline prices in the U.S. to look for anticompetitive behavior, agreed with the Justice Department’s antitrust division to handle the probe, said the people.
From Washington Times: Famously expensive D.C. gas station lowers its prices; reopens under new ownership
From The Washington Times, Wednesday, April 3, 2013 http://www.washingtontimes.com/news/2013/apr/3/famously-expensive-dc-gas-station-lowers-its-price/#
The former Exxon station near the Watergate Hotel in Northwest that regularly charged more than $5 for a gallon of gasoline and routinely exceeded the surrounding competition’s prices by an average of a dollar or more debuted this week as a Valero station.
Prices at the station, which were $5.04 per gallon in November when it closed, were $3.79 per gallon Tuesday after the 4 p.m. relaunch.
* *
The price of gas at the Watergate station — and at other stations owned by Eyob “Joe” Mamo, owner of the Valero and the primary owner of Capitol Petroleum Group — has long been a point of contention. Mr. Mamo owns 45 gas stations in the District, according to a 2011 report in the Washington City Paper.
* *
From The Washington Times, Wednesday, April 3, 2013 http://www.washingtontimes.com/news/2013/apr/3/famously-expensive-dc-gas-station-lowers-its-price/#
The former Exxon station near the Watergate Hotel in Northwest that regularly charged more than $5 for a gallon of gasoline and routinely exceeded the surrounding competition’s prices by an average of a dollar or more debuted this week as a Valero station.
Prices at the station, which were $5.04 per gallon in November when it closed, were $3.79 per gallon Tuesday after the 4 p.m. relaunch.
* *
The price of gas at the Watergate station — and at other stations owned by Eyob “Joe” Mamo, owner of the Valero and the primary owner of Capitol Petroleum Group — has long been a point of contention. Mr. Mamo owns 45 gas stations in the District, according to a 2011 report in the Washington City Paper.
* *
Senator Bernie Sanders continuing attention to gasoline prices in Vermont.
In December, the Burlington Free Press reported on a Bernie Sanders news conference on gasoline prices:
“Clearly a vigorous level of competition is missing from the gas market in northwestern Vermont,” Sanders said.
He noted that prices in Chittenden, Franklin and Grand Isle counties were about 30 cents higher per
gallon Monday than the national average and 20-30 cents higher than gasoline sold over the weekend in central and southern Vermont.
To help consumers shop and to increase their understanding of the factors that govern gas pricing, Sanders
unveiled a new website, http://www.sanders.senate.gov/.
The Press article says that "Sanders has been seeking answers for months as to why gas prices routinely run higher in the state’s northwest corner. After a congressional hearing and staff research, Sanders said, “The reason, we have
concluded, is pretty simple. Three distributors are keeping prices artificially high because they can do that.”
The Press article also reported that Joseph Choquette, a lawyer who lobbies on behalf of
the Vermont Petroleum Association, countered that prices reflect what customers are willing to pay.
The full Press article is at http://www.burlingtonfreepress.com/article/20121210/NEWS03/312100017/New-website-sheds-light-on-Vermont-s-high-gasoline-prices
Posted by DR 2-5-2013
* * *
In December, the Burlington Free Press reported on a Bernie Sanders news conference on gasoline prices:
“Clearly a vigorous level of competition is missing from the gas market in northwestern Vermont,” Sanders said.
He noted that prices in Chittenden, Franklin and Grand Isle counties were about 30 cents higher per
gallon Monday than the national average and 20-30 cents higher than gasoline sold over the weekend in central and southern Vermont.
To help consumers shop and to increase their understanding of the factors that govern gas pricing, Sanders
unveiled a new website, http://www.sanders.senate.gov/.
The Press article says that "Sanders has been seeking answers for months as to why gas prices routinely run higher in the state’s northwest corner. After a congressional hearing and staff research, Sanders said, “The reason, we have
concluded, is pretty simple. Three distributors are keeping prices artificially high because they can do that.”
The Press article also reported that Joseph Choquette, a lawyer who lobbies on behalf of
the Vermont Petroleum Association, countered that prices reflect what customers are willing to pay.
The full Press article is at http://www.burlingtonfreepress.com/article/20121210/NEWS03/312100017/New-website-sheds-light-on-Vermont-s-high-gasoline-prices
Posted by DR 2-5-2013
* * *
From the January 2013 publication of the New Jersey Gasoline C-Store Automotive Association ( www.NJGCA .org):
Executive Director Sal Risalvato of the New Jersey Gasoline C-Store Automotive Association writes about the sale of gas stations in New Jersey following the requirements of the New Jersey "right-of-first-refusal" law:
"At the end of 2011 Exxon dealers received proposals to purchase their properties as a requirement of the NJ Right
of First Refusal law that NJGCA had passed in 2009. I said back then that the legislation was truly historic since only
California has a similar law. Industry insiders and media had been acknowledging just how historic our efforts were in NJ, and the results became obvious last year. Exxon offered real estate to 236 Exxon dealers. By February 197 dealers had exercised their rights under the new law. However, less than 180 were actually able to receive financing and ultimately purchase the dirt that their gas station occupied. It was historic.
I should not dismiss the fact that a few months earlier about 50 Shell dealers also exercised their rights under the law
and purchased their property. More history!
I expect to have a further report soon entitled 'Exxon and Shell Divestiture…One Year Later'”
See more at http://www.njgca.org/wp-content/uploads/January2013OTROnline.pdf
Posted by DR 2-5-2013
* * *
Executive Director Sal Risalvato of the New Jersey Gasoline C-Store Automotive Association writes about the sale of gas stations in New Jersey following the requirements of the New Jersey "right-of-first-refusal" law:
"At the end of 2011 Exxon dealers received proposals to purchase their properties as a requirement of the NJ Right
of First Refusal law that NJGCA had passed in 2009. I said back then that the legislation was truly historic since only
California has a similar law. Industry insiders and media had been acknowledging just how historic our efforts were in NJ, and the results became obvious last year. Exxon offered real estate to 236 Exxon dealers. By February 197 dealers had exercised their rights under the new law. However, less than 180 were actually able to receive financing and ultimately purchase the dirt that their gas station occupied. It was historic.
I should not dismiss the fact that a few months earlier about 50 Shell dealers also exercised their rights under the law
and purchased their property. More history!
I expect to have a further report soon entitled 'Exxon and Shell Divestiture…One Year Later'”
See more at http://www.njgca.org/wp-content/uploads/January2013OTROnline.pdf
Posted by DR 2-5-2013
* * *
From Vermont Public Radio News, December 12, 2013
.
Sanders, Gas Station Owner Dispute Gas Prices:
The head of a company targeted by Senator Bernie Sanders for allegedly overcharging for gasoline says his stations are competitive.
Skip Vallee - president of the company that owns the Maplefields gas stations and convenience stores - says he wants a meeting with Sanders to explain his point of view.
Sanders devoted part of a news conference yesterday to gas companies that he says are overcharging customers.
"You have three distributors up here that control over half of the gas stations in northwestern Vermont and they are keeping prices artificially high in my view simply because they can do that. And what we have seen is that nationally, these gas stations rank at the very highest level of profit margin," Sanders said.
Sanders says the stations in northwestern Vermont are charging 20 to 30 cents a gallon more than those elsewhere in Vermont. And he says the Burlington market is in the top ten markets for profitability.
Sanders has dedicated part of his website to consumer information about gas prices.
For the complete article see http://www.vpr.net/news_detail/96822/sanders-gas-station-owner-dispute-prices/
Posted by DR 1-20-2013
* * *
.
Sanders, Gas Station Owner Dispute Gas Prices:
The head of a company targeted by Senator Bernie Sanders for allegedly overcharging for gasoline says his stations are competitive.
Skip Vallee - president of the company that owns the Maplefields gas stations and convenience stores - says he wants a meeting with Sanders to explain his point of view.
Sanders devoted part of a news conference yesterday to gas companies that he says are overcharging customers.
"You have three distributors up here that control over half of the gas stations in northwestern Vermont and they are keeping prices artificially high in my view simply because they can do that. And what we have seen is that nationally, these gas stations rank at the very highest level of profit margin," Sanders said.
Sanders says the stations in northwestern Vermont are charging 20 to 30 cents a gallon more than those elsewhere in Vermont. And he says the Burlington market is in the top ten markets for profitability.
Sanders has dedicated part of his website to consumer information about gas prices.
For the complete article see http://www.vpr.net/news_detail/96822/sanders-gas-station-owner-dispute-prices/
Posted by DR 1-20-2013
* * *
From the Stamford Conn. Times online, January 20, 2013 By CHRIS BOSAK
Norwalk gas station pays fine for alleged price gouging:
The owners of the Shell gasoline station at 307 Connecticut Ave. has paid a fine of $1,449 to settle allegations of price gouging in the wake of Hurricane Sandy.
The Department of Consumer Protection found that the station raised its gasoline price by 10 cents per gallon on Nov. 1 -- three days after Hurricane Sandy hit the East Coast -- without there being an increase in wholesale gas prices that day.
A commenter said: There are other gas stations in the area. I'm not going to go into the whole theory of markets, but I see more of a violation of "rights" with the fine than with the station posting a higher price. If a customer didn't like the higher rate they could go someplace else.
For the entire article, and comments, see http://www.thehour.com/news/norwalk/norwalk-gas-station-pays-fine-for-alleged-price-gouging/article_4af502c3-9b18-578b-a574-fb99b097f372.html#user-comment-area
Posted by DR 1-20-2013
* * *
Norwalk gas station pays fine for alleged price gouging:
The owners of the Shell gasoline station at 307 Connecticut Ave. has paid a fine of $1,449 to settle allegations of price gouging in the wake of Hurricane Sandy.
The Department of Consumer Protection found that the station raised its gasoline price by 10 cents per gallon on Nov. 1 -- three days after Hurricane Sandy hit the East Coast -- without there being an increase in wholesale gas prices that day.
A commenter said: There are other gas stations in the area. I'm not going to go into the whole theory of markets, but I see more of a violation of "rights" with the fine than with the station posting a higher price. If a customer didn't like the higher rate they could go someplace else.
For the entire article, and comments, see http://www.thehour.com/news/norwalk/norwalk-gas-station-pays-fine-for-alleged-price-gouging/article_4af502c3-9b18-578b-a574-fb99b097f372.html#user-comment-area
Posted by DR 1-20-2013
* * *
From DelcoTimes, January 18, 2013:
According to a report by the Associated Press, Pennsylvania Gov. Tom Corbett will propose that the state’s transportation budget could receive a nearly $2 billion boost per year with new taxes on gas stations.
So, if the stations are getting taxed and they want to stay in business, that means the rate will be transferred to consumers in higher gas prices. “It’s guaranteed to be passed on to customers,” said Bob Rushton, owner of Bob’s Mobil Service on Baltimore Pike in Springfield. “If there are any taxes added to it, any, it is our cost. If they think we are going to eat it, they’ve got another thing coming.”
For complete article see http://www.delcotimes.com/articles/2013/01/18/news/doc50f8bc2cea86a559938801.txt
Posted by DR 1-20-2013
* * *
From Leader-Telegram, Wisconsin 12-13-2012:
Gas stations in Eau Claire and Wausau made more profit on gas than the eight other medium-size Midwest cities researchers studied, according to data showing five months of prices.
Two convenience store chains — Holiday and Kwik Trip — make up for a combined 68 percent of Eau Claire's gas market.
For complete article see http://www.leadertelegram.com/news/front_page/article_d527f414-45b2-11e2-b226-001a4bcf887a.html
Posted by DR 12-23-2012
* * *
From CSD 9-25-2012
Jury: Hot Fuel Not Deceptive
Numerous class-action lawsuits have been filed across the U.S. in 26 states, the District of Columbia and Guam, alleging oil companies and fuel retailers improperly profited from the sale of hot fuel. In a victory for QuikTrip, 7-Eleven and Kum & Go—three c-store retailers in a “hot fuel” lawsuit—a federal jury in Kansas City, Kan. decided that selling gasoline that isn’t adjusted by volume for its temperature (hot fuel), does not violate the Kansas Consumer Protection Act, The Bellingham Herald reported.
The case, in the U.S. District Court of Kansas, was the first to come to a jury verdict in years of legal proceedings over the practice. The jurors found, 10-0, that selling fuel over the industry’s 60-degree standard was not “deceptive” under the state law.
For the complete article, see http://www.csdecisions.com/2012/09/25/kansas-jury-hot-fuel-not-deceptive/
Posrted by DR 1-20-2013
* * *
Gas stations in Eau Claire and Wausau made more profit on gas than the eight other medium-size Midwest cities researchers studied, according to data showing five months of prices.
Two convenience store chains — Holiday and Kwik Trip — make up for a combined 68 percent of Eau Claire's gas market.
For complete article see http://www.leadertelegram.com/news/front_page/article_d527f414-45b2-11e2-b226-001a4bcf887a.html
Posted by DR 12-23-2012
* * *
From CSD 9-25-2012
Jury: Hot Fuel Not Deceptive
Numerous class-action lawsuits have been filed across the U.S. in 26 states, the District of Columbia and Guam, alleging oil companies and fuel retailers improperly profited from the sale of hot fuel. In a victory for QuikTrip, 7-Eleven and Kum & Go—three c-store retailers in a “hot fuel” lawsuit—a federal jury in Kansas City, Kan. decided that selling gasoline that isn’t adjusted by volume for its temperature (hot fuel), does not violate the Kansas Consumer Protection Act, The Bellingham Herald reported.
The case, in the U.S. District Court of Kansas, was the first to come to a jury verdict in years of legal proceedings over the practice. The jurors found, 10-0, that selling fuel over the industry’s 60-degree standard was not “deceptive” under the state law.
For the complete article, see http://www.csdecisions.com/2012/09/25/kansas-jury-hot-fuel-not-deceptive/
Posrted by DR 1-20-2013
* * *
From NASDAQ Article, 11-30-2012:
Wholesale, or spot, gasoline in the Los Angeles market fell 7% to $3.805 a gallon, after gaining 21% in the week through Thursday. Spot gasoline in San Francisco fell 7.4% after rising 15% in the week.
The supply squeeze in the state has been caused by a recent series of refinery accidents and maintenance shutdowns that have sent both wholesale and retail gasoline prices surging. Now, industry professionals say prices have reached the breaking point for some retailers.
"No one is going out and buying product," said Tom Robinson, president of Robinson Oil Corp., which runs a chain of 34 gas stations in Northern California.
Mr. Robinson added that a $1 rise in San Francisco spot prices over the last month finally became too much to bear. "There's probably a lot of different adjectives for it," he said of the sky-rocketing prices, "But I'd call it pretty aggressive."
* * *
For complete article see http://www.nasdaq.com/article/california-wholesale-gasoline-prices-ease-on-sticker-shock-fears-20121005-00702#.ULuRhmcWCVI
Posted by DR 12-2-2012
* * *
Wholesale, or spot, gasoline in the Los Angeles market fell 7% to $3.805 a gallon, after gaining 21% in the week through Thursday. Spot gasoline in San Francisco fell 7.4% after rising 15% in the week.
The supply squeeze in the state has been caused by a recent series of refinery accidents and maintenance shutdowns that have sent both wholesale and retail gasoline prices surging. Now, industry professionals say prices have reached the breaking point for some retailers.
"No one is going out and buying product," said Tom Robinson, president of Robinson Oil Corp., which runs a chain of 34 gas stations in Northern California.
Mr. Robinson added that a $1 rise in San Francisco spot prices over the last month finally became too much to bear. "There's probably a lot of different adjectives for it," he said of the sky-rocketing prices, "But I'd call it pretty aggressive."
* * *
For complete article see http://www.nasdaq.com/article/california-wholesale-gasoline-prices-ease-on-sticker-shock-fears-20121005-00702#.ULuRhmcWCVI
Posted by DR 12-2-2012
* * *
West Coast gas-price spikes should be probed, senators say
Six Western U.S. senators have called for an investigation into recent spikes in gasoline prices.
By Kevin Freking (11-27-2012)
The Associated Press
WASHINGTON — Six Democratic senators representing states along the Pacific Coast asked the Justice Department on Tuesday to investigate the role of oil refineries in gas spikes that occurred in May and October even as crude-oil prices were declining.
* * *
To view article, go to: http://seattletimes.com/html/localnews/2019777008_gasprices28.html
Posted by DR 12-2-2012
* * *
Six Western U.S. senators have called for an investigation into recent spikes in gasoline prices.
By Kevin Freking (11-27-2012)
The Associated Press
WASHINGTON — Six Democratic senators representing states along the Pacific Coast asked the Justice Department on Tuesday to investigate the role of oil refineries in gas spikes that occurred in May and October even as crude-oil prices were declining.
* * *
To view article, go to: http://seattletimes.com/html/localnews/2019777008_gasprices28.html
Posted by DR 12-2-2012
* * *
From UCAN News, October 2012
At $4.72 a gallon, San Diego gas prices are at the highest level since 1918
Posted October 8th, 2012 by Charles Langley
At $4.72 a gallon, gas prices have shattered a 94-year record high
even after the price is adjusted for inflation. The current average
eclipses the all-time record high of $4.64 a gallon set in June of 2008.
Gas prices have climbed almost 60¢ in San Diego since last Monday,
and 40¢ over the weekend.
THE WHOLESALE PRICE PICTURE:
Wholesale prices drive retail prices.
On Saturday, the wholesale prices being charged to unbranded dealers --
dealers who must purchase surplus fuel on the open market -- had dropped.
However, many wholesalers are posting a "lower" price, but aren't selling
fuel, so the price reduction creates a statistical illusion of a downward
moving market.
UCAN's gas project tracks selected wholesalers, and our average on Saturday
showed a decrease of 23¢ a gallon since Thursday, but this huge downward
move is still a minor decline from a Mount Everest style price spike of 75¢ since
Monday. When the wholesale prices charged to both branded and unbranded
dealersare accounted for, the price increase in the last week Monday has been
a monstrous 49¢ - roughly 42¢ on average for brand-name retailers and
40¢ for unbranded.
* * *
For complete article see http://www.ucan.org/gasoline_autos/gas_prices/472_gallon_san_diego_gas_prices_are_highest_level_1918
Postedby DR 12-2-2012
At $4.72 a gallon, San Diego gas prices are at the highest level since 1918
Posted October 8th, 2012 by Charles Langley
At $4.72 a gallon, gas prices have shattered a 94-year record high
even after the price is adjusted for inflation. The current average
eclipses the all-time record high of $4.64 a gallon set in June of 2008.
Gas prices have climbed almost 60¢ in San Diego since last Monday,
and 40¢ over the weekend.
THE WHOLESALE PRICE PICTURE:
Wholesale prices drive retail prices.
On Saturday, the wholesale prices being charged to unbranded dealers --
dealers who must purchase surplus fuel on the open market -- had dropped.
However, many wholesalers are posting a "lower" price, but aren't selling
fuel, so the price reduction creates a statistical illusion of a downward
moving market.
UCAN's gas project tracks selected wholesalers, and our average on Saturday
showed a decrease of 23¢ a gallon since Thursday, but this huge downward
move is still a minor decline from a Mount Everest style price spike of 75¢ since
Monday. When the wholesale prices charged to both branded and unbranded
dealersare accounted for, the price increase in the last week Monday has been
a monstrous 49¢ - roughly 42¢ on average for brand-name retailers and
40¢ for unbranded.
* * *
For complete article see http://www.ucan.org/gasoline_autos/gas_prices/472_gallon_san_diego_gas_prices_are_highest_level_1918
Postedby DR 12-2-2012
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