CITGO is The Pantry's largest fuel supplier. According to a report in The Triangle Business Journal, The Pantry claimed that CITGO was miscalculating the price of the ethanol blend it sells, which the company is alleging [image-nocss] is a breach of contract. The Pantry in June 2008 filed a lawsuit against CITGO in Lee County (N.C.) Superior Court. The suit was moved July 13 to North Carolina Business Court. The Pantry sought damages, the total amount to be determined at trial.
The retailer's supply contract with CITGO was signed in 2003 and runs through 2010. In the suit, The Pantry said that in the second half of 2007, its competitors began selling E10, giving them an advantage.
The Pantry sold E10 by making its own blend. CITGO allowed this, according to the suit, because The Pantry agreed to buy CITGO's E10 when it became available. CITGO made E10 available to The Pantry in April. But The Pantry said CITGO offered no other gasoline for the three octane grades, yet charged more for the E10 it did offer, from "four to six cents over its posted price for clear gasoline of the same grade."
The switch, last year, by CITGO to an all-ethanol product slate at its Southeast terminals is part of the company's ongoing efforts to comply with the federal government's renewable fuels obligation, it said.
"We are pleased with Judge Diaz's decision to dismiss the claims. It recognizes the fact that E10 and clear gasoline are two different products and thus may be priced differently," said Alan Flagg general manager of light oils manager for CITGO. "CITGO is committed to offering competitive prices to all of its customers so that they, in turn, can provide high-quality fuel at competitive prices to consumers," he said.
He added, "The ruling in this case confirms that our pricing approach for E10 and clear gasoline is fair to our marketers and to their customers."
The Pantry did not respond to CSP Daily News' requests for comment by presstime.
Based in Sanford, N.C., The Pantry is a leading independently operated convenience store chain in the southeastern United States and one of the largest independently operated c-store chains in the country, with revenues for fiscal 2008 of approximately $9 billion. As of Feb. 3, 2009, the company operated 1,648 stores in 11 states under select banners, including Kangaroo Express, its primary operating banner.
CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals and other industrial products. The company is owned by PDV America Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela SA, the national oil company of the Bolivarian Republic of Venezuela.
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