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PMAA, FuelQuest Clash

ARLINGTON, Va. -- The Petroleum Marketing Association of America, which represents many of the nation's mom-and-pop jobbers, and FuelQuest Inc., the Houston-based online chain management software group, are engaged in a nasty clash that finds both suing one another.

Litigation stems from a five-year deal inked in 2000 between PMAA and Oilspot Inc., an e-commerce and content provider for the petroleum industry, which was acquired that year by FuelQuest.

Under the arrangement, FuelQuest, as inheritors of the OilSpot deal, would pay $100,000 a year to PMAA. In exchange, PMAA agreed to endorse FuelQuest exclusively for Internet fuel marketing services. To date, FuelQuest has paid $150,000, halting payment earlier this year.

"It's pretty simple," PMAA counsel Bob Bassman told CSNews Online. "FuelQuest signed a five-year deal and now they've decided they want to renegotiate and not pay. They don't say they're broke, which was an 'out' clause.

"When they took over OilSpot, the agreement with PMAA was very important to them. They wanted that contract," Bassman added.

Asked about FuelQuest's counter-suit, alleging that PMAA violated an exclusive endorsement by entering into a deal with competitor DTN Energy, Bassman said, "you're never sued without coming up with a counter-argument. We're working on a reply but you can say that PMAA doesn't find any validity in their claims."

PMAA President Dan Gilligan said that his organization had received FuelQuest's permission to line up DTN as a PMAA partner. "All of us sign contracts we wish we didn't have to honor. But a contract is a contract. They're just looking for a way to get out of it," he said.

Doug Haugh, FuelQuest's vice president of fuel marketing, could not be reached for comment.

The litigation comes as FuelQuest scales back its full-throttle investment in the petroleum marketing segment. A FuelQuest official recently told CSNews Online that while the company continues to produce services for the downstream petroleum market, it is shifting its investment toward businesses that buy fuel products in bulk and recently contracted with solid waste disposal giant Waste Management Inc.

"The growth in the [jobber sector] wasn't what we had hoped," the FuelQuest official said recently. Since its founding, FuelQuest has built a reputation for attending virtually every petroleum-related trade show, delivering presentations whenever possible and entering into alliances with trade groups and media like PMAA and Conveninece Store Petroleum.

But those tracking the online business-to-business fuel community said FuelQuest is noticeably less active these days and that the company had expressed disappointment in the petroleum marketing industry's failure to widely embrace the Internet for business activities. "They spent a lot of time trying to educate the industry and only a few bought into it. The Internet is not on the minds of most petroleum marketers," said an observer familiar with FuelQuest.
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