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Sticker shock: $9 gas at some LukOil stations

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Posted / Last update: 14-09-2012
Omar Kezbari, co-owner of a LukOil gas station on Route 73 in Mount Laurel, posted prices telling motorists he's charging an astounding $9.99 a gallon of gas

Kezbari is taking part of a protest by some LukOil franchise stations in New Jersey and Pennsylvania against their parent company by posting ridiculously high prices for the day. "We're just trying to send a message to LukOil," an angered Kezbari said this morning. "Their cost is very high, and so our cost on the market is higher than anyone else at the retail level."

More than 50 franchise owners plan to raise their prices to more than $8 a gallon to protest what they say is the company's unjustified pricing policies. Kezbari was busy explaining the price to customers, and many were filling up with higher octane gas instead because rates for premium remained normal.

Kezbari's brother, Kay, also a co-owner, said that one customer insisted on getting two gallons - "just to get the receipt," and, he said, "to help the cause."

Sal Risalvato of the New Jersey Gasoline Convenience-Automotive Association (NJGCA), informed that the company has been slow to respond to requests to lower prices.

Michael G. Lewis, vice-president and general counsel for LukOil North America LLC, issued a statement regarding the protest: "We have worked very hard in establishing LUKOIL as a premium brand in the U.S., and value our network of independent dealers," the company statement said. "We deeply regret that the NJGCA, a trade lobbyist, has apparently encouraged public misstatements and ill-conceived actions which harm consumers, rather than engage in constructive dialogue. The NJGCA's efforts appear aimed at zone pricing, 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," the statement added.

But Kezbari argued that he pays more per gallon of gas than competing Wawas charge their customers. He said LukOil refuses to reduce its fuel prices to franchise owners. "We need to compete with Wawa and everyone else," Kezbari said, "but I cannot. The past two years they have been killing all the dealers in the market. That's why you see so many LukOil gas stations closing down. I have many family members affected."

Kezbari's station will really charge cash customers $3.79 per gallon today. He'll charge $3.89 for customers using credit cards. A competing Wawa was selling gas for $3.69 recently.

"My cost from LukOil is the same as on the market" Kezbari said. "So how can I survive when I'm paying $13,000 and $14,000 a month in rent, and three percent on the credit cards, and the cost of all the utilities? Every month, I pull money from my own pocket."

Kezbari added LukOil has said it charges more because it has a well-known brand name. "But oil is oil my friend," Kezbari adds. "When they pump it out of the ground, it doesn't say LukOil.

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