Gasoline Nozzle Newsletter

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Gasoline Nozzle Newsletter

LXXXIX Edition December 2006

Gasoline Retailers Association of Florida

214 StevenageDrive Longwood, Florida32779

407-774-9700 Fax 407-788-3860 e mail

Pat Moricca President SSDA /NCPR-AT

Service Station Dealers of America

Gasoline Retailers Association of Florida is a non-profit association representing Independent Gasoline Retailers, Convenience Stores, Gasoline Service Stations, Repair Shops, Tire Retailers, Truck Stops and Associates throughout Florida. Our goal is to improve the interests of these independent businesses and the motoring public. Cooperation with insurance companies provides benefits for our members. These benefits include money-saving programs for group health, workers' compensation, casualty, and property and gasoline tank liability insurance. Benefits also include financing to purchase your gasoline station property and much more.

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INDUSTRY INFORMATION AND BENEFITS

Pat Moricca

Jackson lawyer sues oil companies over post-Katrina gas prices

Jackson, Miss. - A Jackson lawyer who's considering running for governor next year has filed a federal lawsuit against oil companies and distributors over the increase in gasoline prices after Hurricane Katrina.

The suit by John Arthur Eaves Jr., which represents only one side of a legal argument, accuses the defendants of price gouging during an emergency.

"Hurricane Katrina was the worst natural disaster to befall our state, and it is unthinkable that anyone would try to take advantage of Mississippians and our businesses at such a time," the lawsuit says. "With skyrocketing gas prices over the last year and record oil company profits, it is time to take a stand to fight this egregious behavior and hold accountable those responsible for escalating gas prices that are busting the budgets of Mississippi families and businesses from Biloxi to Batesville."

Thirty-nine Mississippi residents, most from the southern part of the state, are listed as plaintiffs in the lawsuit, which was filed in U.S. District Court in Hattiesburg.

Eaves said his firm sought plaintiffs by placing an advertisement in the Hattiesburg American in November 2005, less than three months after Katrina swept through the state on Aug. 29.

Among the defendants are Chevron Corp., ConocoPhillips and Exxon Mobil Corp.

Exxon Mobil spokeswoman Prem Nair said in an e-mail Friday that she could not comment on the lawsuit because company officials had not had a chance to review it.

"During last year's hurricanes, Exxon Mobil priced fuel responsibly and encouraged our retailers to do the same," Nair said. "In addition, a recent Federal Trade Commission investigation found no instances of market manipulation during Katrina or Rita."

A Federal Trade Commission investigation is like having a Fox in charge of the hen house!

New Congress Targets Oil Companies
Washington -- Big Oil is set to be a top priority for the upcoming Congressional session, according to a Reuters report. New lawmakers taking over the House of Representatives have promised to roll back billions allowed through energy legislation providing tax breaks and incentives to energy corporations last year.
The energy bill that was passed last year contained $2.8 billion in tax breaks and financial incentives for the oil industry. The legislation allowed the industry to quickly write off exploration and drilling costs, and immediately deduct half the cost of refinery expansions and by repealing the subsidies to Big Oil and using the money for research into alternative energy resources.

Up and down in concert!

During the month of November, I tracked gasoline prices at the wholesale terminals of the major oil companies and the results were; prices went up and down in concert. The oil companies change wholesale prices from a fraction of a penny to a big spike at the same time makes one wonder?

Greed!!!

Again, the Oil Company’s greed took over and increased wholesale gasoline price by 5 to 8 cents a gallon on the day before Thanksgiving and lowered the wholesale price by half of the increase the day after Thanksgiving??

California Gains Without Chevron's Deal With USA Petroleum
Last month, Sen. Barbara Boxer, D-Calif., asked the FTC last month to investigate the acquisition, as she felt large oil companies in, including Chevron, could be dominating the market with their large number of gas stations, thus leading to anti-competitive business practices.
In her letter, Boxer stated that the retail gas market is ruled by large branded refiners. Seven major refiners, Chevron included, make up nearly 90 percent of retail gas sold in the state through supply contracts or their own retail stations, according to Boxer. "This means that large branded refiners have a significant effect on retail gas prices in California by virtue of their dominant position in the market," she said. California has about 10,000 gas stations, 1,500 of which under the Chevron or Texaco name, according to Chevron.
The acquisition of USA Petroleum and its assets, including its retail stations, "could further diminish independent and unbranded retailers' market position and present potential anti-competitive effects for consumers, including higher retail prices," Boxer concluded.
On the news of the termination, Boxer said "Finally, there is some good news for the consumer with the termination of this proposal." She added "I believe consumers will be better served without a continuation of consolidation that has eroded the competitive gas market over the past decade."

Ohio marketers oppose bill that would regulate fuel pricing

In Ohio, a state senator has introduced legislation that would bar stations from hiking prices until they receive a new shipment of gas.

“There are a lot of bad things about this bill,” Roger Dreyer, president of the Ohio Petroleum Marketers & Convenience Store Association said. One of the worst things, according to Dreyer, is that it unfairly targets dealers, who have very little power over cost and pricing of fuel. Dreyer said “95 percent of the cost is already in the product by the time it reaches the dealer.”

For example, Dreyer said, in a market where the cost of fuel is rising, the bill would severely hurt operators because it fails to take into consideration replacement cost of fuel.

The OPMCA, whose members operate more than 2,900 facilities in the state, is lobbying against the bill. County auditors would be responsible for spotting violators, who would then be turned over to the state attorney general's office.

Dreyer said that as a practical matter, enforcement would be difficult. “How all that would work no one knows,” he said. “What are they going to do?

Sen. Kirk Schuring, R-Canton, who introduced the Ohio legislation, said, "The motoring public likes the idea, but there are some who have questioned whether or not it's prudent to dictate when prices can go up at the pump.

The bill also would create a 15-member Ohio Task Force on Gasoline Policy, which would monitor gas prices, analyze the state's oil resources, compare prices in Ohio with those in other states, and push for the increased production of alternative fuels.

Gas Retailers Get Gouged
Washington -- The Democratic 110th Congress is looking to pass legislation that eliminates the possibility of gas price-gouging at stations when it controls Capitol Hill in January, said Federal Trade Commission (FTC) chairwoman Deborah Platt Majoras at a discussion at the American Bar Association's fall conference.
Majoras told the audience of lawyers that her contacts believe there is a plan to have legislation aimed at anti-competitive gas-gouging on the books by the end of 2008. She added that such a measure has bi-partisan support and it would not be surprising if Congress passed this legislation.
The head of the House Energy and Commerce Committee, Rep. John Dingell (D-Mich.), already hinted at holding committee hearings on possible price gouging by the gas retailing industry, the report stated.
However, Majoras noted that the FTC found no instances of gas-gouging among gas retailers in the U.S. so far.
High gas prices in 2006 were attributed to two factors, the first being that the Organization of Petroleum Exporting Countries (OPEC) has a hand in determining the price of crude oil, and second, that demand for gasoline has been continually high despite an escalating price, Majoras said at the conference.

In May, Majoras testified at a Senate Commerce Committee hearing on the issue and commented that retailers “might let the gas run out rather than raise prices and risk facing prosecution.

I hope that congress includes the major oil companies’ outrageous profits in their investigation of price gouging. The independent gasoline retailers are struggling and the investigators are looking in the wrong area of the investigation.

We support the investigation if the whole industry is investigated. The General Accounting Office should do the investigation.

Gasoline retailer keeps gas prices high in protest

A familiar horror story throughout the U.S.

The price of gas; a gulping $3.29 a gallon for the cheapest grade and that's the most expensive price in the Bay Area by 30 cents and nearly a buck more than at nearby stations. And it's all because of a dispute with Shell.

The normally quiet Shobeiri could be a poster man for a successful American immigrant story. Shobeiri is angry at Shell about rising rent, and says the company charges him more to purchase gas than nearby Shell stores. When the company refused to pay for damages from a burst water pipe recently, he had enough.

His way of fighting back: Keep prices so high that sales are dramatically down and bring attention to independent dealers like him who feel they are being pushed out. Shobeiri's fight is similar to many other Shell dealers.

``I don't see why I would help sell oil for this corporation if they don't care for me,'' said Shobeiri. ``They call me a partner. Excuse me, but that is baloney. It's a one-way street and says Shell charges him more to purchase wholesale gasoline than nearby other Shell stations, (zone pricing)?

Shell spokeswoman Karyn Leonardi-Cattolica said that ``each retailer has the legal right to set gas prices as they believe appropriate without interference by Shell.'' ???

In Redwood City, Shobeiri used to sell 67,000 gallons of gas a month. Now, five months after freezing his prices, he's down to 24,000 gallons, a drop of about $90,000 in monthly gas receipts, never mind the loss of income from the snack shop. Fewer people stopping for gas means fewer customers buying chips and sodas.

Problems started a year after Shobeiri took over in 2002. He says Shell pays about $3,000 a month for the land on which the station sits. At first, he said, he was told his rent would go up more than fivefold to about $16,000. They finally settled on $8,000 after an appraisal, but taxes raise that to nearly $12,000 a month, Shobeiri said.

The Shell spokeswoman would not divulge details about the contract, but she said the rent the company pays on the land, which the company leases, rose 2.4 percent from a year ago.

The breaking point in the relationship may have occurred when the station was remodeled last spring and Shobeiri asked whether he could install more pumps, including one for diesel. No deal.

Shell reported its third-quarter profits of $5.94 billion.

Retailers Lose to Sophisticated Shoplifters
New York – As if today’s technologies aren’t enough to keep up with, retailers also have to worry about shoplifting. However, it’s not just the folks who swipe a few items from store shelves and walk out undetected, as today’s thieves are using sophisticated methods, reports The Wall Street Journal.

“Using sophisticated tactics such as bar code forgery and fraudulent gift cards, criminals are stealing larger amounts, and it has gotten harder to catch them. Law-enforcement officers say many of the high-tech thieves belong to organized-crime rings that have turned retail theft into big business. And the Internet has made it easier for them to find buyers for the loot,” writes the newspaper.

According to Brad Brekke, vice president of assets protection at Target Corp. and former Federal Bureau of Investigation (FBI) agent, bar code “swindlers” are hard to catch. He told the newspaper that when a cashier recognizes the bar code is ringing up the wrong price, thieves either avoid being caught by paying the difference or saying they don’t want the merchandise anymore and walk out of the store.

California Gas Customers Report Stolen Funds
Costa Mesa, Calif. -- More than 440 people who used debit cards to pay for gasoline at two Costa Mesa, Calif. service stations reported funds stolen from their accounts in Las Vegas, said Sgt. Martin Carver, a spokesman for the Costa Mesa Police Department in a report by The Los Angeles Times.
"We don't know how it was done," said Sgt. Martin Carver, a spokesman for the Costa Mesa Police Department in the report, "but we started getting people coming in to file reports when their bank statements showed the card was used to withdraw cash in Las Vegas."
Victims began calling police Oct. 31 and at least 16 people have filed reports at the Costa Mesa police station, while the rest reported the losses to eight banks, the report stated. However, Carver said the number of victims was expected to increase.
The theft was not unprecedented, authorities said: This summer eight people were arrested in an elaborate scheme to steal more than $1 million by skimming account information from the debit cards of dozens of customers at three Southern California restaurants, said the report.
In that case, restaurant employees used special devices to steal account information from patrons' Wells Fargo and Washington Mutual debit cards, authorities said. Additionally, the employees reportedly passed the information to two alleged ringleaders in exchange for about $200 per card skimmed.

Visa, MasterCard Business Practices ‘Do Nothing’ for Merchant Community
Washington – The Merchants Payments Coalition (MPC) said that a new independent report confirms that “merchants get nothing” out of programs that constitute nearly half of the $30.7 billion in credit and debit card interchange fees Visa and MasterCard collect annually in the United States.

A New Business Model for Card Payments, issued by Chicago’s Diamond Management and Technology Consultants Inc., notes that “processing the original reason for interchange comprises only 13 percent of interchange costs.” Meanwhile, the largest component of interchange, paying for issuer rewards programs, accounts for 44 percent of interchange costs, “but merchants get nothing out of these programs,” the report adds. And the trend is expected to get worse unless there is a fundamental change in how the U.S. credit card system operates.” The card associations and their bank issuers are pursuing revenue growth through higher interchange rates,” according to the report, which notes that since 1999, interchange fees have continually risen. “Given the merchants’ lack of perceived value for what they pay, the situation is clearly unstable,” the report adds. “This report corroborates the message that merchants have communicated to lawmakers over the past year that interchange fees are far, far higher than the actual benefits delivered to both merchants and the vast majority of consumers,” said MPC Chairman Mallory Duncan, senior vice president and general counsel at the National Retail Federation. “This is important research that will help the public understand how much Visa and MasterCard are needlessly charging them. Among other things, this fee is fueling the flood of credit card offers stuffing consumers’ mailboxes. “Visa and MasterCard rules effectively require that interchange be built into prices and make cash discounts all but impossible, so these fees take money out of consumers’ pockets regardless of how they pay,” Duncan said. “Consumers are led to believe that rewards are free, but this study shows consumers are being charged for these rewards whether they ever get to use them or not.”

Gasoline costs are heavier for heavy people

A new study says U.S. drivers are burning nearly 1 billion more gallons of gasoline a year than in 1960 because of weight they've added, the Seattle Times news services reported.
So losing weight could promote fuel conservation and help the environment, as well as bring the more familiar benefits of better health.
"What we have here is a socioeconomic implication of obesity," said Jacobson, who has done numerous studies of how engineering principles can be applied to health issues. "If people decide as a nation to get healthier and lose weight and be fitter, not only will we have a healthier country but we're actually going to reduce our dependence on foreign oil very covertly, simply because we're going to be using less."
Using recent gas prices of $2.20 a gallon, the extra weight translates to about $2.2 billion more spent on gas each year in the U.S.
"If a person reduces the weight in their car, either by removing excess baggage, carrying around less weight in their trunk, or yes, even losing weight, they will indeed see a drop in their fuel consumption," Jacobson said.