Station Operators File Suit Against Distributors Over Gas Prices
HARTFORD, Conn. -- Gas station operators in Connecticut have filed suit against several gasoline distributors, alleging the companies are forcing them and others to pay unreasonable prices for gas. That in turn, the plaintiffs contend, is playing a key role in the state's high gas prices.
According to an Associated Press report, 11 plaintiffs who operate 16 gas stations are listed in the unfair trade practices lawsuit, which was filed in Hartford Superior Court on Thursday. The defendants include Waltham, Mass.-based Alliance Energy LLC and Irving, Texas-based Exxon Mobil Corp.
The gas station operators are seeking an undetermined amount of damages and a court order mandating fair pricing for gasoline products, among other actions. However, Alliance Energy is vowing to fight what its owners call "unfounded accusations."
Alliance Energy acquired 88 gas stations in Connecticut from Exxon Mobil this February. The plaintiffs, who operate some of those sites, allege that when Alliance took over, it began charging 17 cents to 22 cents more per gallon of gas than what they were paying under Exxon Mobil's ownership, the news report stated. Also, the plaintiffs said Alliance has imposed several other conditions that hinder their ability to compete.
"In mid-May, one of my clients complained that there was a 39-cent differential between what he was paying (for gas) and what a competing station was able to charge," said Richard Weinstein, a West Hartford lawyer representing the plaintiffs. "They've all incurred substantial price increases since Alliance took them over, and the dealers have passed those price increases on to consumers."
According to AAA's Daily Fuel Gauge Report, the average price per gallon of regular gas in Connecticut is $4.027 as of this morning. Only three other states top the $4 mark: Alaska, Hawaii and Illinois.
Alliance Energy is one of the largest petroleum marketing distributors in New England and distributes fuel through approximately 500 locations in seven states from Maine to Pennsylvania. The company is owned mostly by the Slifka family of Massachusetts and also has the contracts to provide fuel and operate convenience stores at all of Connecticut's highway service plazas. Besides Exxon and Mobil, the company distributes gas for Sunoco, Shell, CITGO and Gulf stations, as well as unbranded fuel for Global stations, according to the Associated Press.
The Slifkas also own Global Partners LP, another large gas distributor based in Waltham that owns and supplies fuel to about 190 Mobil gas stations in New England and distributes Mobil gas to another 30 independently owned stations.
Richard Slifka, whose family owns both companies and is vice chairman of Global's board of directors, declined to comment specifically on the lawsuit's allegations on Thursday, but said Alliance will fight the claims. "We believe that it's really without merit," Slifka told the Associated Press.
Weinstein said one of his concerns is the scope of Alliance and Global Partners' influence on gas pricing, given the large number of stations owned by the companies in the region. He said he wasn't sure how big the companies' influence is, but suspects it's substantial. The Connecticut lawsuit appears to be the first of its kind against Alliance, according to the news report.
The plaintiffs also claim the Exxon Mobil-Alliance deal violated the state's Petroleum Products Franchise Act because the station operators weren't offered good-faith proposals to buy the properties before they were acquired by Alliance.
The lawsuit also names the Stamford-based Gasoline and Automotive Service Dealers of America, accusing it of playing a role in the Alliance acquisition deal and favoring the company when it was supposed to be representing gas station operators.
Michael Fox, executive director of the dealers group, denied the lawsuit's allegations and said he was frustrated he was being sued by the people he represents. He said he's been fighting for years to get laws passed that prevent the kind of conduct alleged in the complaint, according to the Associated Press.