Fuels

A Pennies Business'

Zone pricing fuels Fox's rage against Big Oil
STAMFORD, Conn. -- For the 11th year, Mike Fox is lobbying the Connecticut legislature for a law that would stop oil companies from the practice of zone pricing: charging some stations more for gasoline than others. It is the reason motorists in Greenwich, Stamford, and other areas that the oil companies view as affluent pay 20 cents, 30 cents and more for a gallon of gas, Fox told The Greenwich Time.

"It's a fundamental unfairness," said Fox, who owned a gas station in Stamford for more than two decades. "All the people I know and care about are paying too much [image-nocss] so ExxonMobil could make $45 billion last year and give the retiring CEO, Lee Raymond, $400 million. He got that off your back and my back."

Yet it's built on a "pennies business," Fox said.

About 15 years ago, when he owned Mike's Mobil Mart, Fox noticed the wholesale price the oil company charged him was creeping up, one cent at a time, he told the newspaper. He talked to other station owners and learned that, in many cases, their wholesale prices were different.

In 1998, the prices began to increase a few cents at a time, he said. He and other gasoline retailers showed their invoices to the attorney general, who got behind them. So did then-Governor John Rowland, the lieutenant governor, then M. Jodi Rell, and the consumer protection commissioner.. A bill was drafted to ban zone pricing.

"With all those people on our side, I thought the bill would sail through," Fox said. "It went nowhere. How naive I was. It shows you the power of Big Oil."

Fox had learned his way around the legislature a few years earlier while lobbying for the state to reduce the gasoline tax. That worked. Lawmakers cut it in increments from 39 cents a gallon in 1997 to 25 cents in 2000, where it remains, said the report. But fighting the oil company lobby in Hartford has proven more difficult, Fox said.

"For the first two years, it was me and one other guy testifying," he told the paper. "The oil companies told the legislators I was nuts; there was no such thing as zone pricing. If you testified in favor of the bill, you'd go back to your station and your gas was five cents a gallon more. That was your punishment for testifying."

That just spurred him on, he said.

In 2000, he sold Mike's Mobil Mart to make way for the 23-story Connecticut Place office tower. He became executive director of the Gasoline & Automotive Service Dealers of America (GASDA), the group he joined to battle the gasoline tax, and he redirected its guns at zone pricing.

On the zone pricing bill, two state representatives from Stamford, James Shapiro and William Tong, "are sticking their necks on the chopping block for something they believe," Fox said.

According to the report, 27 states have tried to limit or ban zone pricing. Each time, the oil company lobbyists have convinced lawmakers that zone pricing is good. It allows oil companies to charge less in areas that have several gas stations, making it easier for them to compete, said the lobbyist in Hartford, Steve Guveyan, executive director of the Connecticut Petroleum Council.

"The industry is charging the going rate, no different from what Stop & Shop does or CVS," he told the Time. "In Stamford, the problem is too many people and not enough gas stations. The price of real estate is sky high, and the city says it wants the land for an office building because that will bring jobs. So the gas stations get edged out. That's not the oil industry's fault."

Having fewer stations may drive pump prices up a few cents, but allowing oil companies to manipulate wholesale prices could increase prices 30 cents a gallon or more, Shapiro said. This bill "would take out a significant amount of the cost of gas statewide by preventing the oil companies from stifling the retail competition," he told the paper.

This year's bill passed one committee and likely will have to make it through another before going to the floor of the House of Representatives, the report said.

"Big Oil should not be charging a higher wholesale price just because the gas is going to Greenwich or Stamford or Westport," Fox said. "Big Oil is trying to make this Fairfield County vs. the rest of the state. But everybody in the state is paying the wrong price."

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