Hawaii Settles Price-Fixing Lawsuit with Major Oils
BP Marketing Lower Sulfur Premium Fuel in Oregon
Studio City Carwash to Take Down Corvette Sign
Lex Brodie's Tire Buys 25 Oahu Stations
Fred Meyer to Open Portland Gasoline Station

HAWAII SETTLES PRICE-FIXING LAWSUIT WITH MAJOR OILS

HONOLULU, HI. — After three years of preparation, a major lawsuit between gasoline suppliers and the state of Hawaii has been settled out of court.

The suit, originally filed in 1998 by the state of Hawaii, charged refiners and wholesalers had agreed to keep gasoline prices artificially high in the Hawaiian islands since 1987 in order to make excessive profits. The state also alleged that the suppliers illegally concealed their collusion to drive up gasoline prices.

The state of Hawaii sought $2 billion in damages in the anti-trust lawsuit from defendants Chevron, Shell Oil, Texaco Inc., Tosco, and Unocal Corp.

After six months of mediation — and only a few weeks before the case was scheduled to go to court — Hawaii agreed to drop the suit in exchange for a $20 million settlement, one percent of the original damages it was asking from the major oil companies.

In court filings, the state said that any potential damages from the suit would “likely go to the state highway fund.” Some consumer groups are unhappy about this action as they felt consumers were overcharged and deserved a rebate from the settlement.

“The government may collect fines, but where will it all go?” asked Makiki resident Jim Kiershner. “The attorneys will wind up with the money and the Islands will continue to be ripped off. I’m an eternal skeptic because it’s been that way for a long, long, long time.”

BHP and Tesoro were parties in the original suit filed in 1998 but have already settled with the state, paying $15 million in damages. Approximately $9 million of that total was used to pay legal fees associated with the remainder of the anti-trust case.

BP MARKETING LOWER-SULFUR PREMIUM FUEL IN OREGON

PORTLAND, OR. — BP has begun marketing its new lower-sulfur premium gasoline through its 58 Arco-branded outlets in Oregon. The company said the price of the premium fuel will remain the same as before the low-sulfur introduction.

BP stated that as its refineries convert their operations to produce additional lower-sulfur fuel, it will have lower-sulfur gas available in all grades. Currently, the company says it will distribute the low sulfur fuel to major cities with air pollution concerns.

BP reports that the new formulations will reduce nitrous oxide (NOx) emissions from motor vehicles by approximately 4 percent, the emissions equivalent of removing 850 cars from area roadways every day.

“This announcement is a big step forward in the effort to improve our air quality,” said Andy Ginsberg, administrator of the Air Quality Division of Oregon’s Department of Environmental Quality. “We welcome this initiative.”

STUDIO CITY CAR WASH TO TAKE DOWN CORVETTE SIGN

STUDIO CITY, CA. — The Studio City Car Wash has agreed to modify its attention-getting sign to end a dispute with local city officials.

At the center of the dispute is a 26-foot-high sign featuring a giant hand holding a sponge and a pink 1957 Corvette. The sign had been up at the carwash on Ventura Boulevard for many years but the newly elected City Attorney said he was trying to crack down on illegal signs and took action against the carwash.

Carwash owner Ben Forat decided to enter a no-contest plea to charges of erecting an illegal sign and agreed to modifications. Under the terms of the agreement, the carwash sign will be no more than 20 feet high with the sponge portion of the sign no greater than 50 square feet.

“The reason I took the plea is because there’s so many more problems in the world that my little issue is nothing,” said Forat. “I want to move on, move to better things.”

LEX BRODIE'S TIRE BUYS 25 OAHU STATIONS

HONOLULU, HI. — Lex Brodie’s Tire Company has agreed to purchase 25 Oahu service stations from U.S. Restaurant Properties.

Dallas-based U.S. Restaurant Properties had originally bought the service stations as well as a terminal at Campbell Industrial Park in 1998 from Texaco. The major oil company had been ordered to divest the Hawaii stations during the Equilon joint venture.

The 25 stations had been rebranded to Arco, 7-Eleven, and Lex Brodie, the Honolulu-based chain. Lex Brodie struck a deal with U.S. Restaurant Properties to purchase the stations outright in January.

FRED MEYER TO OPEN PORTLAND GASOLINE STATION

PORTLAND, OR. — The major Northwest chain store Fred Meyer has announced that it will open its first gasoline station in the Portland area. The station is currently in the permitting phase.

Fred Meyer had already entered the service station industry in the state, opening a gasoline station in Tillamook.

Clackamas County planner Clay Glasgow noted that the Fred Meyer station will be the first station owned by a large chain store in an unincorporated area of the county. “I know we’ll get others,” Glasgow added. “Safeway planned to put one in Damascus, but it was denied because of a wetlands issue. I assume they will redesign and come back.”

Oregon, where self-service fueling is outlawed, has been slow with hypermarket expansion. However, in the last year, Safeway, Albertson’s and Costco have entered the market. Safeway currently operates six stations in Oregon and Albertson’s has opened a site in Portland.

Fred Meyer officials note that their first service station opened in Fairbanks, Alaska, in July 2000. The company currently has seven stations open “and six under construction in the Northwest and Alaska.” Spokesman Rob Boley added that under the company’s current plans “most Fred Meyer stores eventually will sell fuel. We buy from various suppliers. All are major refineries.”

Originally published in the February 2002 issue of O&A Marketing News.
Copyright 2002 by KAL Publications Inc.