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article imageGas station owners protest, hike gas price to $9.99 per gallon

By Leigh Goessl     Sep 13, 2012 in Business
Some New Jersey and Pennsylvania gas station owners are upset with the LUKOIL franchise. In protest, retailers hiked their gas prices up to $9.99 per gallon yesterday.
According to several media sources, franchisees took part of a protest against the Russian-owned LUKOIL by raising their advertised gas prices to levels to a minimum of $8 per gallon, and some went as high as $9.99.
"We're just trying to send a message to LUKOIL," an angered Omar Kezbari said, reported Kezbari is co-owner of a LUKOIL gas station in New Jersey.
"Their cost is very high, and so our cost on the market is higher than anyone else at the retail level," he said.
The franchisees are angry over LUKOIL's pricing policies, and over 50 owners were reported to be on board to participate in the protest. The media reports station owners say they are paying more per gallon to the supplier that what a local competitor, Wawa, charges customers. Owners say that LUKOIL refuses to reduce fuel prices to franchisees, which prevents them from being competitive with other gas station brands.
"We need to compete with Wawa and everyone else," Kezbari said, "but I cannot. The past two years they have been killing all the dealers in the market. That's why you see so many LUKOIL gas stations closing down. I have many family members affected."
He notes that in addition to paying elevated prices, he's also absorbing credit card fees, in addition to paying rent and utilities. Also, in New Jersey, where the LUKOIL brand is prominent on roadways, there is a law that makes it illegal for customers to pump their own gas, meaning employees have to be staffed at all hours.
“For reasons we simply cannot comprehend, LUKOIL continually sells gasoline to lessee retailers at higher-than-justifiable prices,” Risalvato Sal Risalvato of the New Jersey Gasoline, C-Store, Automotive Association said. “No matter what the market conditions are on a particular day, LUKOIL’s prices are higher than just about every retail competitor.”
Consumers were surprised to see that gas prices were excessively high yesterday, but some didn't notice the change until after they'd pumped their gas. Media reports noted many customers, once aware of the reasoning behind the hike, were sympathetic. One customer purportedly pumped two gallons of gas just to show support, well aware of the price.
In response to the protest, LUKOIL issued a statement which said:
"We have worked very hard in establishing LUKOIL as a premium brand in the U.S., and value our network of independent dealers," the company statement said. "We deeply regret that New Jersey Gasoline Convenience-Automotive Association (NJGCA), a trade lobbyist, has apparently encouraged public misstatements and ill-conceived actions which harm consumers, rather than engage in constructive dialogue."
The protest yesterday was only scheduled to be a one-day event.
What kind of impact do you think this type of protest will have?
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