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Pat Moricca, President

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March 2003 NEWSLETTER XXXXIV Edition

Gasoline Retailers Association of Florida is a non-profit association representing Independent Gasoline Retailers, Convenience Stores, Gasoline Service Stations, Repair Shops, Tire Retailers, Truck Stops and Associates throughout Florida. Our goal is to improve the interests of these independent businesses and the motoring public. Cooperation with insurance companies provides benefits for our members. These benefits include money-saving programs for group health, workers' compensation dividend program, casualty, property and gasoline tank liability insurance. Benefits also include financing to purchase your gasoline station property and much more.

Any eligible businessman or woman, who joins, and participates in on-going programs, will find that his/her savings in overhead costs will more than justify the dues that each member pays.

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Disclaimer: Comments, articles, and data we provide are based on information we deem to be accurate and reliable. However we cannot guarantee, nor do we accept responsibility, for the accuracy of this information.

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Station Owner Who Received Stolen Gas Sentenced
Gets three years probation, must pay restitution!
BOSTON -- A Malden, Mass., station owner was sentenced Wednesday for receiving tanker loads of gasoline stolen from Gulf Oil's Chelsea, Mass., terminal, reports the Associated Press.

Mihran Zeitounian, owner of World Gas, was sentenced by a federal judge to three years of probation, with the first six months in home detention with electronic monitoring. He was also ordered to pay $23,800 in restitution and a $2,000 fine. He pleaded guilty in September to receiving gasoline that was stolen from interstate shipments of fuel.

Three other defendants in this case have already pleaded guilty. One of them, Frank Romano, of Weymouth, Mass., worked at the Gulf facility, while another defendant, Miguel Carlo, of Randolph, Mass., was a driver for one of the independent companies that transported gasoline from the terminal, federal prosecutors said.

In two incidents in May 2001, Romano and Carlo stole two tankers of gasoline. Carlo then delivered the fuel to Zeitounian's station for $16,000, or about 80 cents a gallon, prosecutors said.

The second theft, in which the fourth defendant, Michael Richards, of Tewksbury, Mass., was involved, was caught on tape by Gulf management, authorities said.

Growing Gas Prices Prompt Call for Investigation
February 20, 2003

WASHINGTON, DC -- As gas prices continue to climb--crude oil for March delivery rose to a 29-month high of $37.05 on Tuesday--Sen. Charles Schumer (D-NY) wants the Federal Trade Commission to determine if gas prices are fair.

"Pump prices are spiking so much that it looks like some wartime profiteers might be trying to make a quick buck," said Schumer.

It's worth noting that with retailers making pennies per gallon, and margins declining as prices rise, that consumers in Schumer's home state currently pay about 50 cents per gallon in state and federal taxes, one of the highest rates in the United States.

Sen. Charles Schumer

Schumer and some other lawmakers want oil to be released from the U.S. Strategic Petroleum Reserve in order to reduce gas prices, reports USA Today. However, President Bush, the oil industry and others are against such a move.

NACS Director of Communications Jeff Lenard expressed frustration with the latest accusations leveled at retailers. He told USA Today that the latest price hikes are a result of rising crude-oil prices. "It's not the retailer that is responsible for these price hikes," he noted in yesterday's edition of USA Today.

Florida AG asks FTC to look into possible gouging
TALLAHASSEE, Fla. -- Florida Attorney General Charlie Crist has asked the Federal Trade Commission to investigate the recent dramatic spike in gasoline prices, and to find out whether stations in the state are taking advantage of possible war in the Middle East to artificially drive up prices, reports the Fort Lauderdale Sun-Sentinel.

CSP Daily News reported yesterday that such action by Crist was imminent. A groundswell of gasoline price gouging allegations has occurred in recent weeks, fueled by rising prices, media attention and a lack of understanding by consumers about the reasons for the increases. The American Automobile Association also recently fanned the flames by suggesting that gouging may be taking place.

A G Charlie Crist Florida's average cost per gallon for regular gasoline on Tuesday was $1.66, up 19 cents from a month earlier and 56 cents more than it cost one year ago, according to AAA. This is the highest average price ever in Florida, and it is three cents more than the national average at a time of year when gasoline prices are usually lower, AAA said.

In South Florida, the average is between $1.696 and $1.72 in Broward, Miami-Dade and Palm Beach counties, AAA said.

“I am concerned that some companies or retailers are taking advantage of the impending crisis to increase their profits by unjustifiably raising prices,” Crist said in a letter to Timothy J. Muris, commissioner of the Federal Trade Commission.

Crist said the commission should investigate whether gasoline retailers are colluding to falsely inflate prices.

Pat Moricca, president of the Gasoline Retailers Association of Florida, said Crist should broaden the scope of his request because retailers are simply passing on cost increases from wholesalers. “I'm all for an investigation, but he should look at all facets of the industry from the gas stations up to the oil companies, because that's where the price increases are coming from,” Moricca said.

There is no shortage of oil right now; he said, so wholesale prices should be steady. “If [gas station owners] increase their prices, the volume of gas bought by consumers goes down, so they lose out,” Moricca said. “The people who make money on this are the oil companies.”

Another cost for retailers, Moricca said, is that as prices go up, consumers also tend to increase their use of credit cards. That increases the amount of credit card surcharges retailers have to pay. Retailers have to give 3% of the total charged to the credit card companies.

Crist asked the FTC, which monitors retail and wholesale gasoline prices around the nation, to examine the Florida prices and report back on whether there is any evidence of price gouging. He also urged Florida motorists to shop for the best price available and report any suspicious price increases to the state's tollfree fraud hotline. His department has already received almost 100 consumer complaints about increasing gasoline prices in the last few days, Crist said.

Price Gouging Alleged by AAA
WASHINGTON, DC -- February gasoline prices have increased amid speculation of a possible war with Iraq, AAA has suggested that gasoline stations are price gouging reported by USA Today. AAA spokesman Geoff Sundstrom doesn’t understand the complexity of the gasoline industry to make a statement like that. When gasoline suppliers Exxon/Mobil, BP/Amoco, etc. raise the wholesale price of gasoline, the gasoline station has to respond to the increase and pass it on to the consumer. The gasoline retailer cost of doing business increases when gasoline prices are high because of a higher percent of credit card use. If Mr. Sundstrom wants to accuse anyone, he should start by looking at our friendly Opec suppliers. According to USA Today, reported, regular-grade gasoline was selling on average for $1.605 per gallon based on sales at 60,000 service stations published by AAA. We encourage the media to take a hard look at the prices increases.

"This looks uncomfortably close to price gouging. The fundamentals do not justify U.S. drivers paying the highest gasoline price on record for the month of February," said Geoff Sundstrom, spokesperson for AAA.

Most energy analysts, however, say that several factors are impacting the world oil market, including the continuing oil strike in Venezuela and the possibility of war with Iraq. The consumer should complaint to their elected officials about high gasoline prices.

Driving U.S. gasoline prices up:

Increased demand. Americans are driving more and flying less, Saunders notes. Big discounts on new and used cars the past year also have brought some buyers into the market who'd otherwise have unreliable vehicles and wouldn't be driving as much.

Gasoline use went up 3% last year, Saunders says, instead of its normal 1.5% to 2% year-to-year increase.

Decreased production. Unusually cold weather has kept refiners making more heating oil and less gasoline. Now, many refineries must close for maintenance before cranking up gasoline production. The move to gasoline is complicated by regulations requiring special summer blends to cut pollution.
Supply interruption. Not only is the US not getting oil from Venezuela, it's also exporting 80,000 barrels of gasoline a day to Venezuela, Saunders says.

Gasoline Driveoffs Warning
HARRISBURG, Pa. -- Filling up and then driving off without paying could now cost Pennsylvanians their driver's license. That's what a new sticker soon to appear on retail gasoline pumps throughout the state will tell consumers.

With state Representative Dick Hess (R) and state Senator Allen Kukovich (D) leading the way, last year's Legislative Act 116 made it official: anyone convicted of the retail theft of gasoline could have his or her driver's license suspended.

Gasoline theft costs the industry up to $7 million a year. That is why consumers will soon start seeing the warning signs, that driving off without paying for their gasoline is a crime.

Florida has had the law for a few years.

EMPLOYEE FIRED FOR HER CIVIC DUTY
DURHAM, N.C. -- A convenience store chain is standing by its decision to fire an assistant store manager in Durham, N.C., whose phone call led to the arrest of an escaped murderer, the Associated Press reports. WilcoHess upholds discharge decision for clerk who phoned police about killer.

After Cynthia Sherlin alerted police on December 13, 2002, that convicted killer Omar Lionel Reed had been in her store, other employees complained that they got threats of retaliation, said Ron Padgett, CFO of Winston-Salem, N.C.-based WilcoHess LLC. The company has 84 stores in North Carolina and 150 in South Carolina, Virginia, Pennsylvania, Georgia and Alabama, branded Hess and Exxon.

“We tried to do what we think is best for the health, safety and well-being of our employees and our customers,” Padgett said. “We felt like the life of Ms. Sherlin, our employees and our customers could be in danger. It's an unfortunate situation, but we were worried about that threat and we stand by that action.”

The Durham City Council is scheduled to decide at a work session today whether to send a letter to WilcoHess in Sherlin's support. “We ask the community to join us in abating crime, and to fire this lady for doing what I think is her civic duty sends a chilling message to the community,” council member Howard Clement said. “The City Council is the representative of the larger community, and we need to let [WilcoHess] know our concerns

ExxonMobil Reports Healthy Quarterly Boost

IRVING, Texas -- Exxon Mobil Corp. has reported fourth-quarter 2002 net income of $4.09 billion, 60 cents per share, a 53% increase of $1.41 billion from fourth-quarter 2001 and a 55% increase of $1.450 billion from third-quarter 2002. Excluding merger effects, discontinued operations and other special items, fourth-quarter 2002 earnings were $3.79 billion, 56 cents per share, an increase of $921 million from fourth-quarter 2001, and an increase of $861 million from third-quarter 2002.

Revenue for fourth-quarter 2002 totaled $56.211 billion compared with $47.744 billion in 2001.

Downstream earnings of $821 million decreased $198 million from the fourth quarter of last year. Marketing margins were weaker with improvements in the U.S. more than offset by declines elsewhere. Worldwide refining margins, although improved against prior quarters in 2002, were on average weaker than fourth-quarter 2001. Earnings in both quarters benefited from planned reductions in inventory levels. Petroleum product sales were 8,017 kbd, flat with last year's fourth quarter.

Sunoco Heads South
Sunoco Inc. has strengthened its presence in the Southeast region of the U.S. with its agreement to acquire nearly 200 stores from Marathon Ashland Petroleum LLC (MAP), Findlay, Ohio.

As reported earlier, MAP, through its wholly owned retail unit Speedway SuperAmerica LLC (SSA), signed a definitive agreement to sell all 193 of its convenience stores located in Florida, South Carolina, North Carolina and Georgia to Sunoco for $140 million plus store inventory.

“When completed, this transaction will provide high-volume, quality assets with solid returns and give the company an excellent position in a high-growth market,” Sunoco spokesperson Gerald Davis. All of the sites are company-operated locations with c-stores, with 115 sites located in Florida, 62 in South Carolina, 13 in North Carolina and 3 in Georgia. The sites will be rebranded to Sunoco gasoline and A Plus c-stores. The majority of the sites are owned in fee, with 54 subject to long-term lease agreements. The companies anticipate closing the transaction in the latter half of the second quarter of 2003.

GasUpUSA Discount gas card company called PYRAMID SCHEME!
The company claims to have signed up 78,000 customers since its July 2002 startup. With each member paying a $149.99 or $159.99 annual fee, depending on when they signed up, that represents about $12 million in sales.

The fee allows members to pay $20.75 up to eight times a month for cards redeemable at gasoline stations for $25. Members also can earn commissions as independent

distributors by referring additional members. Distributors for GasUpUSA are reportedly told that they can earn up to $3,000 a day.

But in November, the Kansas attorney general called GasUpUSA an illegal pyramid scheme, says the report. And in December, the Idaho attorney general warned that GasUpUSA distributors were falsely claiming his office had reviewed the company and found it to be legal, the report adds.

That same month, Patriot Bank, Allentown, froze the company's accounts, the newspaper says. At a court hearing Thursday, according to the report, a lawyer for the bank said that was done because bank executives became concerned that GasUpUSA might be an illegal pyramid scheme.

GasUpUSA is suing the bank for access to $1.2 million it froze, along with damages the company believes the bank owes for harming its business. With the company's assets frozen, customers are complaining about not receiving the discount cards they paid for, and distributors say they haven't been paid their commissions since early December. People from New York, Florida, Massachusetts, Illinois and California have complained about not receiving discount cards or commissions.

Patriot Bank needs to hold onto the company's assets to pay for continued chargebacks against GasUpUSA's accounts, said Mark D. Bradshaw, the bank's attorney. Of $11 million in Internet transactions processed by Patriot Bank for the business in its first five months, $949,000 had to be returned because some who were charged claimed they never authorized payments or the account charged turned out to be dormant or nonexistent, Bradshaw said. GasUpUSA deducts membership fees directly from customers' bank accounts and has a no refund policy, according to the company’s website.

Philip Morris Cos. officially becomes Altria Group

NEW YORK -- Philip Morris Cos. Inc., the parent company of Philip Morris USA Inc., Philip Morris International Inc. and Kraft Foods Inc., yesterday officially changed its name to Altria Group Inc. All of the units will keep their existing names.

The change brings “better clarity” to the corporate structure in terms of the relationship of the parent to its operating companies, the parent company said. These operating companies will continue to grow such brands as Marlboro, Parliament, Virginia Slims, Kraft, Maxwell House, Oreo, Ritz and Oscar Mayer.

The New York City-based company, which proposed the new name in November 2001, said the name Altria was coined from “altus”--the Latin word for “high.” The company's plans to become Altria proceeded slowly in part because of a case filed against it by a venture capital firm called Altira Group LLC over the similarity of the proposed name. That case was dismissed in late 2002. Another company with a similar name, privately held medical billing firm Altria Healthcare Corp., was also concerned about the proposed change, Philip Morris resolved that situation “through amicable discussion,” the company said.