Over 50 gas stations across New Jersey and Pennsylvania have raised the price of their fuel to more than eight dollars a gallon. They are all Lukoil stations, and their owners have raised prices in protest of practices by Lukoil North America that they say leave individual gas station owners at a competitive disadvantage.
According to a report by the Huffington Post (full disclosure: HP is also owned by Autoblog parent AOL), the protest is a response to the high prices that Lukoil apparently charges its franchise owners for fuel. The owners of the gas stations contend that they are paying more for delivery than what competing stations are charging to the public.
Sal Risalvato is a member of the New Jersey Gasoline, Convenience, Automotive Association, and is one of the owners frustrated with Lukoil. "They essentially sell the very same gasoline to stations in close proximity of each other at different prices in order to game the market and compete with other gasoline brands," says Risalvato. The result of this practice, he claims, is pricing that may differ by as much as 25 cents a gallon between a given Lukoil station and a nearby competitor. In a business where some people drive miles out of the way for the cheapest gas prices, the effects of that disparity can be massive.
Protesting Lukoil franchise owners have upped their gas prices to eight dollars a gallon and beyond to raise awareness for these practices. Lukoil, Russia's second-largest oil producer, first arrived in the U.S. in 2003. Today there are more than 500 stations throughout the Northeast and Mid-Atlantic regions.