O&A Masthead

October 1999 Issue Highlights

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Alaska Officials Investigate Prices
Meteor Industries to Acquire Jardine
BP Station and Its Town Are For Sale
California City May Hike Minimum Wage to $10.69


ANCHORAGE, AK. — Alaska officials have launched an investigation into the high price of gasoline in the state. The investigation is examining if there is collusion between vendors to keep the price high in Alaska, despite the state's large oil reserves and refining operations.

"We're sitting on a pool of oil, and it's being refined here. Why is it so expensive? These are more than rhetorical questions," Assistant Attorney General Doug Gardner stated.

Alaskan investigators claim that in 1997, the average retail price of gasoline in Alaska (before taxes) was $1.16 a gallon, higher than Hawaii's $1.10 a gallon or Washington state's 87.8 cents a gallon. The national average price in 1997 was 78.7 cents a gallon.

The major oil companies are protesting the investigation, stating that the economics of supply and demand determined the higher prices in the state, not any collusion between the oil companies.

In addition, Tesoro Petroleum Corp., and Chevron have filed motions asking the court to limit the investigation. A ruling has yet to be handed down by a judge on the majors' motions.


DENVER, CO. — Petroleum distributor Meteor Industries, Inc., has signed an agreement to acquire Jardine Petroleum Company of Salt Lake City, UT. Terms of the sale were not disclosed.

Included in the deal are Jardine's distribution facilities in Logan, Ogden, North Salt Lake and Tremonton, UT., as well as in Preston, ID., and its eight cardlocks on the CFN network. Meteor says it will combine Jardine's operations in the Rocky Mountain region with its existing operations.

The acquisition is expected to close during the fourth quarter of the year.

Jardine Petroleum, with annual sales of more than $55 million, was one of the largest petroleum distributors in the Rockies. The company markets products under the Chevron, Conoco, Phillips, Shell, Texaco, and Valvoline brands.

Jardine reportedly sold 66 million gallons of gasoline and diesel fuel, 2.2 million gallons of propane and 1.4 million gallons of lubricants in the last 12 months.

In a related purchase, Meteor reports it is also acquiring two transportation services companies that were serving Jardine: Petro Express and PetroSolutions.


OTIS, OR. — Looking to buy a service station? There is one for sale in the tiny town of Otis, OR., that is available — as is the rest of the town.

Otis, located on Oregon's Highway 18 five miles east of Lincoln City, is for sale for approximately $3 million. The price tag includes the BP branded gasoline station and its c-store, used primarily by traveling Oregonians heading for the coast.

The town of Otis also includes a Pronto Pup hot dog stand, the Otis CafÈ, the Otis Post office, an auto repair garage, two houses, an empty 25-stall horse barn, a helicopter storage shed, a garage, an old grange hall and 190 acres of farmland.

The town is also known for its Car Body Fishing Hole, named for the auto frames dumped in the lake to keep the land from eroding many years ago and now a successful salmon fishing spot.

The 193 acre town is owned by Vivian Lematta. It was originally purchased by her grandfather from descendants of the Siletz Indians for $800 in 1910.

"This is not exactly an exciting place for things to happen," BP station Attendant Ben Noland, 57, told reporters. "The only excitement on this corner is when the ambulance goes by and everyone gets on the horn to see what happened."

The area has not been developed because zoning laws make it difficult to build new homes on most of the property and limit the type of new businesses that could be added to the town.

Oregon officials note that they're not sure how many people currently live in Otis as it is unincorporated and keeps no exact records.


SANTA MONICA, CA. — The Santa Monica City Council is considering raising the minimum wage within the city to $10.69 an hour.

The new, substantially higher minimum wage, would apply to all businesses along the "coastal strip" of the city that have over 50 employees.

After spending the last 10 years working to lure restaurants and retailers back into Santa Monica — which had become virtually deserted — the City Council has turned around and is penalizing the successful businesses in the area.

"The political climate for the business community has become more difficult here," said Ken Kutcher, a Santa Monica-based attorney specializing in local issues. "Santa Monica has always had a lot of regulation. This [city council] in particular has taken it to a new level."

Originally published in the October 1999 issue of O&A Marketing News.
Copyright 1999 by KAL Publications Inc.

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