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[XiaNaphryz]

Gas prices hit $8 in NJ, Pa. in Lukoil protest

SOUTH PLAINFIELD, N.J. (AP) — More than 50 Lukoil gas stations in New Jersey and Pennsylvania jacked up prices to more than $8 a gallon Wednesday to protest what they say are unfair pricing practices by Lukoil North America that leave them at a competitive disadvantage.

Dozens of Lukoil franchise owners also gathered to protest at a station in this central New Jersey town where the posted prices were an eye-popping $8.99 a gallon.

The owners and the New Jersey Gasoline, Convenience, Automotive Association said the one-day protest was aimed at raising consumer awareness about the challenges facing Lukoil dealers and getting the company to respond to dealer grievances.

Station owners said Lukoil charges them more for gasoline than other companies charge their franchisees, forcing them to pass that increase onto consumers. It is not uncommon, they said, to see a competitor selling gas to the public for considerably less than what they're paying Lukoil per gallon.

"My price on invoices is what my competitors are selling on this street," said Khalid Zackria, owner of the South Plainfield station where the dealers assembled. "That's why it's hard for me to survive."

Sal Risalvato, executive director of the gas station association, said Lukoil charges 7 cents more per gallon than other companies and that owners might pay more on top of that depending on where their station is located

Lukoil North America issued a statement defending its pricing practices, which it said comply with state law, and accused the gas station association of encouraging "public misstatements and ill-conceived actions." It said it does not comment on its competitors' prices..

Lukoil is Russia's second-largest oil producer. The first Lukoil-branded service stations in the U.S. opened in 2003 and today the company has more than 500 in the Northeast and Mid-Atlantic. Many of the franchisees entered into agreements with other companies that were bought by Lukoil.

The gas station association said the high prices were meant to get the attention of customers so they know the price pressures they are facing.

Gas stations taking part in the protest handed out fliers to customers explaining why they are struggling to keep their prices down and put up banners asking customers to contact Lukoil. One car pulled into the Lukoil station around the time of the protest; its driver circled the pumps and left.

Roger Verma, who co-owns four Lukoil stations and three Exxon stations, said he pays 18 to 20 cents more per gallon to buy gas from Lukoil than from Exxon.

"Me, as a consumer myself, won't go to Lukoil," Verma said. "How can I expect my customers to?"

Steve Hamparsumian, who owns a Lukoil in Bloomingdale, said his gas station was acquired by Lukoil about six years ago. Since then he said he has lost 50 percent of his business. He said his rent has tripled in that time.

"We have to pay considerably higher prices for anyone else," Hamparsumian said. "Not only are we selling less, our customers have to pay higher prices."

Risalvato said Lukoil and other companies engage in zone pricing, or varying prices based on the competition in local marketplaces. He said Lukoil is an "egregious offender" when it comes to zone pricing, further adding to the higher price it charges owners for gas.

Lukoil, in its statement, defended zone pricing, saying it's a "commercially reasonable practice" used by gasoline marketers for many years and fully compliant with state law.

"We deeply regret that the NJGCA, a trade lobbyist, has apparently encouraged public misstatements and ill-conceived actions which harm consumers, rather than engage in constructive dialogue," the company said.

Tom Kloza, chief analyst at the Oil Price Information Service, which has an office in central New Jersey, said Lukoil and its dealers have had a tenuous relationship over the past few years.

"There has been a history of discontent," he said.

 

[perfectchaos007]

In Before Euro GAF comes in to say those protest prices are average prices in their homeland.

 

[FStop7]

Meanwhile he prices at Darthoil are still great! Come to the dark side!

 

[JORMBO]

Their gas stations are always empty since its so much cheaper down the road.

 

[Gisk]

While they go wah wah, I'll get my gas at Wawa

 

[Acerac]

I love the phrasing used. "complies with state law... commercially reasonable practice".

 

[UpperCaseN]

Meanwhile he prices at Darthoil are still great! Come to the dark side!

hahahaha!

 

[sangreal]

at least it's full service

 

[goomba]

Petrol (converted from galons to litres and from usd to nzd) would be US$9.71 a galon here in NZ.

 

[XiaNaphryz]

Their gas stations are always empty since its so much cheaper down the road.

Which is the reason they're protesting.

 

[Ganhyun]

I assume that they cannot purchase their gas from another supplier. Did Lukoil buy the business or the contracts for supplying gas?

 

[Slavik81]

Station owners said Lukoil charges them more for gasoline than other companies charge their franchisees, forcing them to pass that increase onto consumers. It is not uncommon, they said, to see a competitor selling gas to the public for considerably less than what they're paying Lukoil per gallon.

This isn't as surprising as it sounds. Gas stations aren't set up to make their money on gasoline. It's sold pretty much at cost. They're designed to make money selling overpriced snacks or attracting business to the nearby stores.

 

[mj1108]

Speculators are looking at this now thinking "People will pay $8.99 for a gallon of gas? Time to raise the prices!"

 

[jon bones]

Speculators are looking at this now thinking "People will pay $8.99 for a gallon of gas? Time to raise the prices!"

"speculators" are not an ultra organized super powerful cartel

 

[Kagari]

Gas recently went back up to 3.99 here... even that is bad enough.

 

[Lambtron]

Gas recently went back up to 3.99 here... even that is bad enough.

Went up to $3.89 here today. Thankfully the gas station by my work still had gas at $3.65 on my lunch break. I filled up. I'm expecting to pay $4.19 at the gas station in the border town I fill up at on my way to Canada next weekend. Sigh.

 

[Delusibeta]

In Before Euro GAF comes in to say those protest prices are average prices in their homeland.

According to the AA, the highest price they could find is £1.361/litre, which translates to approximately £5.15/gallon which is approximately $8.30. The lowest price (the supermarkets) converts to $8.10/gallon. Don't get me started on diesel.

I mock your protest, since it is merely adopting British Pricing.

 

[speculawyer]

I had never even heard of LukOil stations. I knew about the LukOil oil company.

Well, sucks for them. Perhaps they can bail on their association with LukOil and become independents?

 

[B.K.]

If Lukoil is so bad, why don't the station owners buy franchises of other companies? They are plenty of other gas companies. They don't HAVE to be Lukoils.

 

[twinturbo2]

It's the future, guys, get used to it.

 

[NervousXtian]

This isn't as surprising as it sounds. Gas stations aren't set up to make their money on gasoline. It's sold pretty much at cost. They're designed to make money selling overpriced snacks or attracting business to the nearby stores.

You are wrong. Quite a few stations don't even have stores, and why the fuck would a person run a business to make OTHER people money by bringing them into OTHER peoples stores.

Nice try though.

If Lukoil is so bad, why don't the station owners buy franchises of other companies? They are plenty of other gas companies. They don't HAVE to be Lukoils.

Contacts, how do those work again? If they easily could, they would.

 

[AndresON777]

It's like $3.85 in metro Atlanta. Public transit here is awful too

 

[Slavik81]

You are wrong. Quite a few stations don't even have stores, and why the fuck would a person run a business to make OTHER people money by bringing them into OTHER peoples stores.

Nice try though.

My source on that is discussions with relatives in the oil industry. I live in Calgary; I have a lot of them. Everything I've heard is that gas stations sell practically at cost. Occasionally they'll continue to operate stores that are losing money, too, due to the expense of closing a gas station and the environmental cleanup that goes with it. However, it's true that I haven't done any independent verification on the things I've been told.

By the way, the other stores are usually things like grocery stores. They sometimes give you a coupon for money back on store purchases when you buy gasoline to tie the two together more than proximity. I also never see gas stations without an attached convenience store. Perhaps the market is different in Canada than in the USA.

 

[bjork]

$4+ is now common here. Wouldn't be so bad if my trip to work wasn't 70ish miles round trip.

 

[Autumn Wind]

Lukoil hasn't exactly been a successful name here where I'm at in Monmouth County. There was an old Mobil station near Monmouth Mall and got turned into a Lukoil and now it is a Joe's Crab Shack.

There is another Lukoil that took over for a Mobil in Eatontown and is directly across from an Exxon. I do not know if it doubled prices though just figure I pass it along.

 

[soepje]

In Before Euro GAF comes in to say those protest prices are average prices in their homeland.

I had to pay 1,76 euro´s a liter yesterday . And that was at an unmanned gasstation. BP was asking for 1,80 euro. Texaco is probably even worse then BP.

Did the math: 8,59 us dollar a gallon.

 

[gibut]

i pumped at 4.25 a gallon today in NY. i drive about 70 miles a day round trip Gas is now my biggest expense.

 

[Darklord]

In Before Euro GAF comes in to say those protest prices are average prices in their homeland.

And Australia.

 

[Koomaster]

I'm surprised this didn't cause some sort of panic. I know if I was driving down the road and saw a station advertising prices of $8+ per gallon I would freak out. Then passing another station with 'normal' priced gas, I'd definitely fill up and purchase some portable containers and fill them up too thinking gas was about to skyrocket in price.

 

[OriginofHysteria]

Here in Somerset county NJ, I don't go to the Lukoil here because its such a pain in the ass to get out of.

I'd rather drive 10 secs to get to Valero where its cheaper and convenient.

 

[Bulbo Urethral Baggins]

It's so confusing when we don't have George Bush to blame any more.

 

[atomsk]

all I know about Lukeoil is the supposed connections to the russian mafia

plenty of them around in Ocean County, but other stations are always cheaper

 

[VALIS]

That's gotta be tough. You buy a franchise of one company, it gets sold to another, now your investment lies in the hands of completely different people with completely different policies.

 

[Rad-]

In Before Euro GAF comes in to say those protest prices are average prices in their homeland.

1.79€/litre here.