10

The J J

CIX Edition August 2008

Gasoline Retailers Association of Florida

214 Stevenage Drive Longwood, Florida 32779

http://www.flagas.com

e mail

407-774-9700 SSDA/NCPR-AT

Pat Moricca President Member Service Station Dealers of America

INDEPENDENT BRANDS

VISIT OUR WEB SITE FOR THE LATEST GASOLINE

INDUSTRY INFORMATION AND BENEFITS

www.flagas.com

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, casualty and property and gasoline tank liability insurance. Benefits also include financing to purchase your gasoline station property and much more.

The problems facing our industry today affect every dealer, no matter how large or small. And, since no one individual could possibly begin to solve these problems alone, it remains that each should joinin a collective effort to protect his/her business investment.

Join the Gasoline Retailers Association of Florida and help in the fight to keep the

Motor Fuel Marketing Practices Act of Florida (Below Cost) law.

Make an important investment in your business future for less than $1 a day.

Here is an example of an over reaching Attorney General!

New Jersey Attorney General Anne Milgram released a report to the public disclosing the names of 350 gasoline retailers trying to ‘scam motorists’. In her press conference, the Attorney General stated these dishonest retailers knowingly deceived consumers.

The Attorney General took a small group of retailers that genuinely sought to deceive the public and lumped them in with gasoline stations that had minor administrative infractions to

sensationalize the situation and make it seem she had defended the public interest.

Pat Moricca But the deceptive manner in which the Attorney General packaged this information and presented it to the public went too far.

The minor violations; pump was out of calibration whether giving to much gasoline or to little gasoline. To change the

calibration, the seals would have to be broken, a gasoline calibration can was not on site, a broken street price sign, and

a gasoline station had not received their renewal state fuel license that was filed and other minor violations.

Only the 50 gasoline stations with true violation should have been published and not lumped with the 300 gasoline stations with minor violation that have done Nothing dishonest.

The New Jersey Gasoline – C-Store – Automotive Association and all gasoline retailers association throughout the United States do not support dishonest business owners.

The 50 gasoline stations with true violation should be punished to the fullest extent of the law.

I hope the Attorney General’s office will send an open letter of apology to the media and a letter to the 300 gasoline stations so they can gain their reputation back and be recognized as honest businesses.

This type of cavalier behavior should not be tolerated by the public.

Media Misleads…Again
Good Morning America portrays cash-or-credit option as "bait-and-switch" ploy

Alexandria, Va. -- Gas station owners are guilty of "luring" customers to their pumps and then pulling a "bait-and-switch" with a credit fee, according to ABC's Good Morning America, according to a report by the Business & Media Institute (BMI), which tracks anti-business bias in the media. The segment suggested "outraged" drivers were being swindled into paying more for gasoline than was advertised.

"Most drivers don't carry enough cash to be able to afford gas at these record prices," ABC correspondent Bianna Golodryga said in a June 9 report. "But take a look at what happens when you swipe: $4.27 turns into $4.35." The gas station in question displayed a price sign for regular unleaded at $4.27. But after she used a credit card the price went up to $4.35.

But the pump featured in Golodryga's report clearly listed a $4.35 price tag for credit purchases, said BMI. The increase at the station was about 2%, the same fee retailers pay credit card companies. ABC portrayed the price hikes as more sinister than owners offsetting costs involved in selling gasoline on credit despite the fact drivers could still pay the lower price in cash.

Michele Mount, a spokesperson for AAA, called it a "typical bait-and-switch," although video used in Golodryga's report showed that at least some stations clearly noted their posted price for "cash purchases."

Mount told GMA another reason gas stations offer cheaper gasoline for cash is so customers have to go inside to pay, "because while you're there, you're going to also pick up a coffee, a soda, maybe even a sandwich."

But Kathy Chu explained in USA Today, cited in BMI's report, that "a growing number of gas stations across the nation are launching promotions to encourage drivers to choose cash over credit. They're doing so because as gas prices rise, so do credit card fees, thereby cutting into the stations' already slim profit margins."When they do, the credit card customers think they are paying a surcharge when they are not, and they take their business elsewhere, he said.

There are state laws requiring posted street pricing signs to distinguish cash and credit card pricing and also on the gasoline pumps. This type of reporting has painted gasoline retailers as being dishonest. I hope gasoline retailers complain and fight this type of irresponsible reporting.

I’m surprised ABC’s Good Morning America reported this article without investigating the accusations and should apologize to the independent gasoline retailers. The article didn’t mention about the credit card companies’ outrageous fees ($7.6 billion in 2007), the oil companies’ outrageous profits (ExxonMobil $40 billion net profit in 2007)leading the pack while the top 5 oil companies net profit of $120 billion in 2007.

Big Oil profits (eye-popping profits) steered to investors

Houston: As giant oil companies like ExxonMobil and ConocoPhillips is another round of eye-popping quarterly profits, just where is all that money going?

The companies insist they're trying to find new oil that might help bring down gas prices, but the money they spend on exploration is nothing compared with what they spend on stock buybacks and dividends.

It's good news for shareholders, including mutual funds and retirement plans for millions of Americans, but no help to drivers already making drastic cutbacks to offset the high cost of fuel.

The five biggest international oil companies plowed about 55 percent of the cash they made from their businesses into stock buybacks and dividends last year, up from 30 percent in 2000 and just 1 percent in 1993, according to Rice University's James A. Baker III Institute for Public Policy.

The percentage they spend to find new deposits of fossil fuels has remained flat for years, in the mid-single digits.

The issue has become more sensitive as lawmakers and Americans frustrated by high gas prices have balked at gaudy reports of oil industry profits.

In the first three months of this year, Exxon Mobil Corp., the world's biggest publicly traded oil company, shelled out $8.8 billion on stock buybacks alone.

Exxon Mobil 2Q profit sets US record

Houston - Lifted by record crude prices, ExxonMobil says its second-quarter net income rose nearly 14 percent to $11.68 billion up from $10.26 billion, a year ago and the largest quarterly profit ever by any U.S. corporation.

The world's largest publicly traded oil company said its net income for the April-June period Revenue rose 40 percent to

$138.1 billion from $98.4 billion in the year-earlier quarter.

BP 2Q profit up 28 percent

London - BP PLC reported a 28 percent rise in second-quarter profit, exceeding analyst expectations, as crude oil soared to record levels and natural gas also made big gains.

BP, Europe's second biggest oil producer behind Royal Dutch Shell PLC, posted profit of $9.47 billion for the three months ending June 30, up from $7.38 billion in the same period a year ago. Revenue jumped 49 percent to $110.98 billion as the price of a barrel of oil rose by around 35 percent over the quarter.

Occidental Profit Jumps 63% as Oil Climbs to Record

Occidental Petroleum Corp., the fourth-largest U.S. oil company by market value, said second- quarter profit rose 63 percent as crude prices climbed above $140 a barrel for the first time and production increased. Net income jumped to $2.3 billion, from $1.41 billion, a year earlier, the Los Angeles-based company said today in a statement.

ConocoPhillips reports second-quarter net income of $5.4 billion for the same quarter in 2007. Revenues were $71.4 billion, versus $47.4 billion a year ago and this enabled us to repurchase $2.5 billion of ConocoPhillips common stock.

Tip of the iceberg

Massachusetts

After 49 years in business, the fuel tanks at a Mobil station in Boston were filled one final time and the station will be closed when the gasoline is gone, said The Boston Globe. The 5,000-square-foot shop is too quaint for Mobil to keep, said Leo Pagano, 67, one of two brothers who own the station.

After nearly 50 years in business, Gaskell's Service Station in Mendon closed earlier this month and has been put up for sale, a result of escalating fuel prices, the owners told The Milford Daily News. The station opened in June 1958. It closed as a Shell station, but had also been a Gulf, a CITGO and a Texaco. He had ordered 9,500 gallons of gasoline last week but canceled the load. It would have cost $45,000. "I didn't know how we were going to pay for it," he said. "That was the end of it."

Ohio

After nearly 40 years, the Duke Travel Plaza or Buckeye Lake Truck Stop closed in mid-June said The Zanesville Times. Oklahoma

Longtime Ada station owner Jim Martin has had to close two of his businesses recently. After 40 years, he ran the pumps dry at his Phillips 66 station. Another station he owns in Ada closed in March, said The Ada Evening News. "I've been selling Phillips 66 gasoline for 51 years," he said. "Eleven years in Tulsa and 40 years here in Ada….

Oregon

The pumps ran dry June 13 at Earl's Union 76 in Salem, said The Statesman Journal. William Earl Rutland, whom everyone knows as Earl, was forced to close the business. The day before his scheduled June delivery, Rutland was informed he would have to pay $50,000 up front.

Pennsylvania

Times-Tribune.

The Philly Express in York closed in late May, reported The York Daily Record.

Tennessee

Rising pressure from the global petroleum market has forced Dyersburg-based Joe G. Baker Oil Co. Inc., a family business established in 1952, to close, said The State Gazette.

Texas

Shaw Pidani's Mobil station, a fixture in the South Austin neighborhood of Barton Hills for 40 years, closed at the end of June, reported The Austin American-Statesman.
Vermont

After 30 years, Chuck Rollins has sold Chuck's Mobil in Winooski to Maplefields, a branch of R L Vallee Inc., because of the poor economy, Rollins told The Burlington Free Press.

West Virginia

McWilliams Hilltop Service Station closed over the weekend after selling off its remaining gasoline, diesel and LP gas and collecting some past debts, The Mountain Statesman said. A landmark in Grafton for nearly 50 years.

In today’s gasoline industry, Commodities Exchange speculators, rumors, innuendoes, middle east turmoil, devalued dollar, crude oil prices, zone pricing, greed, manipulation are some reasons for high gasoline prices. The oil companies’ record profits do not represent the independent gasoline retailer’s profits. Credit card surcharge cuts into the gasoline retailers slim margins and approximately 80 percent of sales are made with credit cards. The average credit card fee is between 2½ and 3 percent and selling gasoline above $4 a gallon (10 to 12 cents a gallon credit card fee) creates a loss almost every time a credit card is used.

Many gasoline stations have closed their pumps or went out of business therefore less competition will increase prices.

Once the independent gasoline stations close; they are gone forever (3,184 closed in 2007 in the U.S).

Small Gas Stations Start to Power Down

Fayetteville:
Drivers may soon have more than just the price of gas to contend with: Those traveling in rural areas could have a hard time finding anyone to sell them gas at all. Several privately owned gas stations in the Cape Fear region are considering whether to stop accepting credit cards, due to the fees that stations must pay to credit card companies for each transaction. Some stations have stopped selling gas all together.

The fees average 3 percent of the amount customers charge with a card. At $4 per gallon, those fees are eroding the slim profit margins that keep mom-and-pop stations afloat.

Joe Warren's Citgo has filled tanks in Salemburg since 1954. But he recently stopped allowing in-house charge accounts. Between the cost of gas and the fees from credit card companies, he just can't carry the monthly accounts anymore.

Warren, who runs the 54-year-old Salemburg station, says he typically pays about 3 percent in credit card fees. So one gallon of gas at $4 requires paying the credit card company 12 cents. Warren's profit on mark-up is about five to six cents per gallon of gas. He loses six to seven cents per gallon because of fees.

"Oil companies are saying we have a 10 percent profit margin," he said. "I'd be tickled to death with a 10 percent profit margin on gas. I could afford to take credit cards then."

Carol Gifford, a spokeswoman for AAA Carolinas in Charlotte, said it’s important for smaller operations especially in rural areas to be able to stay in business. "Consumers are going to see limited choices for them," Gifford said. "They are going to stop at a gas station that only accepts cash and who has cash? Motorists may be traveling in a rural area with few stations and no ATMs around, and find themselves stuck."