Kleine estimated the total package BP is offering at approximately $50 [image-nocss] million to $70 million. "They are going to get a check," he told the news agency. "They're being given these dollars for use in their business."
The cash component will be based on distributors' volume and will be higher for outlets along the Gulf Coast than for those elsewhere in the country, he added.
As more Americans reportedly shun BP gasoline as a form of protest over the Gulf oil spill, station owners have been insisting BP do more to help them convince motorists that such boycotts mostly hurt independently owned businesses, not the British oil company. (Click here for previous CSP Daily News coverage.)
Some BP-branded gas stations have reported sales declines of 10% to 40% from Florida to Illinois since the April 20 rig explosion and oil spill in the Gulf of Mexico.
BP owns just a fraction of the more than 11,000 U.S. stations that sell its fuel under the BP, Amoco and ARCO banners. Most are owned by local businessmen whose primary connection to the oil company is the logo and a contract to buy gasoline.
Distributors would still be free to sue BP and seek compensation from the $20 billion compensation fund if they choose, Kleine added.
BP spokesperson Scott Dean confirmed for AP that the package includes volume allowances and reductions in credit-card fees that merchants pay when customers use their credit cards to buy gasoline and items in convenience stores.
"Teams of BP staff are also being deployed to help these independent businesspeople activate consumer loyalty programs at their sites to help retain consumers and to educate them on BP's response plan in the Gulf of Mexico," Dean said. "BP will continue to evaluate the programs and offers as the situation and environment evolves."
He added that BP is rolling out a marketing and advertising package that includes "Locally Owned, Locally Operated" media and marketing support such as point of purchase signage, radio, flyers, posters and postcards.
As to the compensation fund, BP spokesperson Debra Reed told AP previously that the overseer of the fund has stated that anyone is welcome to file a claim. Validity is up to the administrator.
Kleine said the 475 U.S. BP distributors, many of whom own or operate BP-branded stations, were being notified directly by the company. Calls began Monday and would likely continue through Wednesday, he told AP.
The cash will be used by the distributors how they see fit, according to Kleine, who said the money could result in discounts to consumers at BP-branded pumps. Some distributors may use the money to bolster their bottom lines, which have been affected because of the boycotts.
"There's a lot of variance in terms of the business effect of this incident," Kleine said. "To try to manage this nationally, it's just too big of an elephant. They recognized that the people that have the best knowledge and can apply the resources best are the local distributors."
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