Los Angeles Dealers Claim Price Fixing

LOS ANGELES -- A group service station dealers in Los Angeles yesterday told a federal judge that three major oil companies fixed prices and raised rents in a bid to drive them out of business.

The 39 dealers named as plaintiffs in the suit are seeking class-action status.
The dealers claim that San Francisco-based Shell Oil Co., White Plains, N.Y.-based Texaco Inc. and Saudi Refining Inc. have conspired to fix prices since 1998 through, Equiva Services LLC, a joint venture the trio of companies operated to refine and market fuel products. Texaco left the alliance after receiving regulatory approval in September to merge with Chevron Corp.

The independent station operators, who rent their gas stations but own their businesses, claim the joint venture violates antitrust law and is forcing dealers out of business across the country, according to the Associated Press.

"Fix the price, raise the rent, and you get rid of the dealers. Then you can control the price of gas with one phone call," said Fred Dagher, who operates six stations in Los Angeles.

Before the joint venture, there were 2,500 independent dealers across the country. Today there are 1,100, said Dagher. "What hurt these stations is the gas companies, not the economy," he said.

Cameron Smyth, a spokesman for Equiva, said the joint venture was formed to improve marketing efficiencies, and the alliance is confident the judge will rule in its favor.

Lawyers for both sides presented depositions Monday. Details of the filings were restricted by a confidentiality order. They represent the first major step forward in the case, which was filed in June 1999, the report said.

Dagher said average monthly rents for independent service station operators have increased to $8,900 from $2,500 in 1998.
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