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Shell Game at Gas Stations Pays Big

FROM OUR SEPT 2005 SHELL NEWS ARCHIVE

NEW YORK DAILY NEWS: Shell Game at Gas Stations Pays Big

“On Sept. 1, just three days after Hurricane Katrina struck the Gulf Coast, top executives at Shell Oil’s Texas headquarters took a public stand against gasoline price gouging.”: “That same day, Motiva Enterprises LLC, Shell’s oil refining subsidiary, hiked the wholesale price of gasoline for Shell dealers throughout the Bronx by a whopping 20 cents a gallon, according to company records obtained by the Daily News. Those records show that since the hurricane disaster, Shell has increased its wholesale gasoline price on six separate occasions”

Thursday, September 8, 2005

By Juan Gonzalez

On Sept. 1, just three days after Hurricane Katrina struck the Gulf Coast, top executives at Shell Oil’s Texas headquarters took a public stand against gasoline price gouging.

“We encourage our wholesalers and dealers to . . . practice restraint during these periods,” the press release from Shell said.

The company even urged the public to contact local governments “if you feel a gasoline station is charging a price that is out of line with other stations in your market.”

That same day, Motiva Enterprises LLC, Shell’s oil refining subsidiary, hiked the wholesale price of gasoline for Shell dealers throughout the Bronx by a whopping 20 cents a gallon, according to company records obtained by the Daily News. Those records show that since the hurricane disaster, Shell has increased its wholesale gasoline price on six separate occasions for its Bronx dealers.

On Aug. 31, the company hiked the price twice in one day – first at 3 p.m.

and then at 6 p.m. “These oil companies are out of control,” said a veteran Shell dealer in the Bronx who is furious at the company’s tactics.

“There’s no supply problem,” said the dealer, who asked not to be identified.

“Shell’s just forcing us to raise the price. This gas was refined more than a month ago, so why charge people more for it? It’s just greed.”

Even the price of Shell gas depends on the neighborhood. At a Shell station on E. 233rd St. in the north Bronx, for example, the pump price of premium gas yesterday was $3.51, while at the the Bartow Ave. station in Co-op City, it was $3.89 – 38 cents more.

Adnan Muzniv, the manager at the 233rd St. station, told me there hadn’t been a price increase “in the last three days.”

But at Ralph’s Shell Station on Bruckner Blvd. and Castle Hill Ave., where premium yesterday morning was $3.59 a gallon, dealer Nancy Gianatasio said Shell notified her by E-mail Tuesday night that her wholesale price would go up 20 cents a gallon starting at 8 p.m. yesterday.

How is it possible, you might ask, for an oil company to charge its own dealers in the same borough different prices for the same gas?

The practice is far more common than we realize, says state Assemblyman Richard Brodsky (D-Westchester).

“It’s called zone pricing,” Brodsky said. “The oil companies are forcing dealers in some neighborhoods to charge higher prices. These are artificial increases not related to supply in demand.”

In other words, price gouging.

Brodsky has introduced a bill in Albany to make zone pricing illegal.

But no one in Gov. Pataki’s administration or at City Hall seems to be paying much attention to these outrageous gas hikes since the hurricane.

Sen. Chuck Schumer (D-N.Y.) is about the only one to speak out.

Eliot Spitzer, our attorney general who loves to make big headlines slapping the wrists of Wall Street crooks, is AWOL while oil companies pick the pockets of millions of motorists every day.

From here, it looks like oil companies are exploiting Katrina more than Enron and the gas companies did during the California blackouts a few years back.

I contacted Shell’s headquarters yesterday to ask about its supply and demand situation and the impact of the hurricane on the price of its oil. A spokesman referred me in an E-mail to the company Web site.

On the Web site, I noticed that Shell, which has thousands of employees and three refineries in the Gulf Coast area, had announced it is donating all of $3 million in emergency aid for hurricane relief.

You should know that during the second quarter of 2005, the Royal Dutch Shell Co. reported a profit of $5.2 billion – a 34% increase over the same period in 2004.

In other words, Shell is donating a little more than 1 hour’s worth of last quarter’s profits to the hundreds of thousands left homeless in the Gulf Coast.

Meanwhile, in the Bronx, New York’s poorest borough, it has hiked the price of its gasoline six times in 10 days.

Juan Gonzalez is a Daily News columnist.

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