USA Gasoline fights high prices by halting sales

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USA Gasoline fights high prices by halting sales

By Maria Zate Ventura County Star writer Wednesday September 6, 2000

In response to ever-increasing gasoline prices, USA Gasoline Corp. had planned to temporarily stop selling gasoline at all of its 13 stations in Ventura County on Tuesday, according to Chuck Nichols, vice president of operations for USA Gasoline based in Agoura Hills.

As an independent supplier, USA Gasoline depends on excess gasoline produced by the major oil companies, and it purchases the fuel daily on the open market. The price of gasoline Tuesday hit $2.10 on the open market, said Nichols. "That's 75 cents higher than it was a year ago," he added.

USA Gasoline stated it is facing a situation where open market prices are substantially higher than the retail prices of major oil stations and other stations that sell gasoline at lower prices. Gasoline prices at several stations along Victoria Avenue in Ventura averaged about $1.80 Friday before the Labor Day weekend.

USA Gasoline said it had four options to take in response to high gasoline prices: It could raise retail prices high enough not to lose money, it could surrender the independent USA brand and operate under a major oil company brand, it could sell gasoline at a loss of 20 cents to 30 cents per gallon, or it could temporarily stop selling gasoline.

"As soon as the prices go down, we'll start selling gas again. But right now, the major oil companies are hoarding the product and trying to drive the independent stations out of business," Nichols said.

Gasoline pumps at USA Gasoline's local stations in Ventura, Oxnard, Port Hueneme, Santa Paula, Fillmore, Moorpark and Thousand Oaks were wrapped with yellow caution tape Tuesday, preventing customers from filling up.

Only two USA stations in Camarillo were selling gasoline Tuesday, and those had planned to cease fuel sales by the end of the day.

All USA Gasoline convenience shops will continue to sell other products aside from gasoline.

At this time, only USA Gasoline stations in California have temporarily ceased selling fuel.

http://www.staronline.com/news/337753.shtml

-- Martin Thompson (mthom1927@aol.com), September 06, 2000

Answers

When the wholesale price jumps the retail price the independents are really caught in a bind. Can't blame them for closing up shop.

-- Billiver (billiver@aol.com), September 07, 2000.

USA Gasoline shutting all state pumps Company says wholesale gasoline prices too high, financial losses would mount By Leslie Parrilla Ventura County Star writer Thursday September 7, 2000

USA Gasoline Corp. has temporarily stopped selling gas at all of its Southern California stations and plans to shut off the pumps at all Northern California locations by the end of the week.

The decision was made in an effort to save itself from drowning in financial losses caused by ever-increasing gas prices, company officials said.

"We've been selling at cost or under cost for the last month," said Chuck Nichols, vice president of operation for USA Gasoline, based in Agoura Hills. "We just couldn't afford to do it anymore."

Two Camarillo stations expected to close Friday were the only Southern California stations still open Wednesday, exhausting remaining gasoline.

All USAconvenience stores will remain open and stations outside California are not affected.

The 35-year-old company operates 143 stations nationwide, 100 in California, including 13 in Ventura County. Layoffs for some of the company's 2,500 employees are expected to begin soon.

"We're planning this day by day," said Nichols. "This came about within the last two weeks when wholesale prices of gasoline rose above retail prices."

As an independent supplier, the company makes purchases daily of excess gasoline produced by the major oil companies on the open market.

Until wholesale prices drop below retail prices, the stations will remain closed.

If prices continue to climb, the company's last resort is to sell out to a major company.

At $1.89 a gallon Wednesday, Nichols said it can't compete with $1.80 and $1.79 competitor's prices.

"The wholesale price today was up to $2.25 a gallon; that's what we have to pay for it," he said.

For the last two weeks the company has made appeals to Gov. Gray Davis and state senators for help, but had heard nothing as of Wednesday.

USAis one of the few large independent gasoline companies left in the United States, according to Nichols, who believes the major oil companies are running the independents out of business.

"I think there's some type of plan by the major oil companies to control the market in California. That's where they're working at the present time," he said. "All the rest (of the independents) have been bought up by major oil companies."

News of the stations closing came as a shock to all of the motorists interviewed at the Carmen Drive location in Camarillo.

Higher prices didn't seem to matter to some customers who said convenience or loyalty to the station was why they pulled into USA.

http://www.staronline.com/news/337883.shtml

-- Doris (reaper1@mindspring.com), September 07, 2000.


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