Gasoline prices are seen at the Lukoil gas station in South Plainfield, N.J., Sept. 12, 2012.
Motorists in New Jersey and Pennsylvania were greeted to an unwanted surprise on Wednesday, when the the price of gas — without any prior notice — appeared to nearly double, with some stations charged an eye-watering $9.99 per gallon.
But according to NBC News, the sudden price hike doesn’t have anything to do with a drastic cut in supply or sudden mideast turmoil. Instead, it’s a protest by more than 50 Lukoil franchise owners across the two northeastern states against the Russian-owned petroleum giant.
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At issue is Lukoil’s practice of “zone pricing,” in which wholesale gas prices the station-owners pay to Lukoil can differ by as much as 25 cents a gallon, even if the stations are quite close to each other. “We’re just trying to send a message,” Omar Kezbari, who co-owns a Lukoil gas station on Route 73 in Mount Laurel, New Jersey explained to the Philadelphia Enquirer. “Their cost is very high, and so our cost on the market is higher than anyone else at the retail level.”
His brother Kay told NBC News: “I feel they have been gouging us.” He said his colleagues have been “begging” Lukoil to reduce their prices. “We are not looking to get rich. I am trying to survive,” he added.
A spokesman for Lukoil North America, a subsidiary branch of parent company OAO Lukoil, issued a statement to ABC News, expressing that it values “our network of independent dealers.”
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“We deeply regret that the NJGCA [New Jersey Gasoline-Convenience-Automotive Association], a trade lobbyist, has apparently encouraged public misstatements and ill-conceived actions which harm consumers, rather than engage in constructive dialogue,” the statement read.
The statement also defended the Lukoil’s use of zone pricing, which it described as a “commercially reasonable practice used by gasoline marketers for many years,” which “is fully compliant with New Jersey statutes governing the sale of motor fuel.”
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Such assurances surely won’t be enough to satisfy Sal Risalvato, executive director of the station owners group, who revealed to NBC that the protest stemmed from years of brewing discontent among franchise owners and threatened further price rises should their complaints remain unheard.
“They have suffered with image problems and high prices that are making them uncompetitive. Enough is enough,” he warned.
Drivers will be pleased to know that at least when it comes to their $9.99 gas, enough is definitely enough. The price rise was planned to last just 24 hours.