Texas Jobbers Fume Over Prices


The Texas Petroleum Marketers and Convenience Store Association (TPCA) is accusing major oil companies of conducting price inversions, the controversial tactic in which gasoline distributors pay more on the wholesale end than what oil-owned stations charge to motorists.

TPCA, which represents 450 independent petroleum marketers responsible for the sale of more than 9 billion gallons of motor fuel a year, has sent letters to several major oil companies, as well as the Federal Trade Commission.

In a letter obtained by CSNews Online to Exxon Mobil Corp. Chairman Lee Raymond, TPCA President John Phillips cautioned, "the predatory and anticompetitive conduct of your company leaves us no other choice but to solicit your assistance before more formal legal measures are initiated." The letter is dated Oct. 31, 2001.

According to independent operators interviewed, retail facilities operated by the major oil companies and refiners are often 10 to 12 cents below what the wholesaler is paying at the rack. These independents say the major oil companies are lowering retail prices to better compete against high-volume gasoline retailers. However, such bargains are not being passed to the dealers and jobbers who have buying contracts with the major oil companies.

"While some may justify this practice in the name of meeting competition," said Phillips, "it is simply nothing more than a thinly veiled predatory attempt to eliminate competition."

Oil companies have denied wrongdoing. While Texas law is rather lax on industry pricing policies, the Federal Trade Commission is investigating motor fuel pricing practices.
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