HOUSTON -- Venezuelan President Hugo Chavez's recent visit to the United States to speak before the United Nations, during which he derided President George W. Bush as the devil, isn't doing CITGO Petroleum Corp. any favors.
The Houston-based company, a subsidiary of Venezuela's state-run oil company, is taking it on the chin in Florida, where a state legislator wants CITGO gas stations kicked off state's Turnpike, and in Dallas, where 7-Eleven officials are now pointing fingers as one of the reasons the company has cut its gasoline-supply ties [image-nocss] with CITGO beginning this month.
As previously reported in CSP Daily News, 7-Eleven Inc. is dropping CITGO as its gasoline supplier after more than 20 years as part of a previously announced plan by the convenience store operator to launch its own brand of fuel.
For the first time, 7-Eleven officials said Wednesday that the company's decision was partly motivated by politics. A company spokesperson told the Associated Press that 7-Eleven is worried anti-American comments made by Chavez this week might prompt motorists to fill-up elsewhere.
Chavez has called Bush the devil and an alcoholic. The U.S. government has warned that Chavez is a destabilizing force in Latin America, according to AP.
"Regardless of politics, we sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president," said 7-Eleven spokesperson Margaret Chabris. "Certainly Chavez's position and statements over the past year or so didn't tempt us to stay with CITGO.
Instead, 7-Eleven, which sells gasoline at 2,100 of its 5,300 U.S. stores, will now purchase fuel from several distributors, including Tower Energy Group of Torrance, Calif., Sinclair Oil of Salt Lake City, and Houston-based Frontier Oil Corp., according to AP.
Chabris said 7-Eleven's decision to sell its own brand was based on many factors, including CITGO's decision this summer to stop supplying stations in parts of Texas and other states to focus on retailers closer to its refineries in Corpus Christi, Lake Charles, La., and Lemont, Ill.
But 7-Eleven had been considering creating its own brand of fuel since at least early last year, and some analysts suggested 7-Eleven may now be hyping the political angle a way to curry favor with U.S. consumers, according to AP.
This has nothing to do with Chavez," Oil Price Information Service (OPIS) director Tom Kloza told AP. "They (7-Eleven) just didn't want to be tied to one supplier."
Kloza said all 7-Eleven did was seek out suppliers who could sell it the cheapest fuel and "that was not CITGO."
[To read 7-Eleven CEO Joe DePinto's discussion of the change, see page 12 of the August issue of CSP magazine. For more on the changes at CITGO, see page 68 of the October issue of CSP magazine.]
In a statementreleased late yesterday, CITGO said, "Earlier this year and after many months of deliberation, CITGO Petroleum Corp. decided to allow its gasoline-supply contract with 7-Eleven to expire at the end of September 2006. This decision was announced last July.The 7-Eleven contract did not fit within CITGO's strategy to balance sales with refinery production after the sale of its interest in a Houston area refinery.
7-Eleven has been a valued customer for many years and we wish them the best, stated Alan Flagg, general manager light oils marketing.
CITGO spokesperson Fernando Garay told AP 7-Eleven was a "significant" part of CITGO's retail presence in Texas and Florida. "It was a valued relationship," he said.
Meanwhile, Florida State Rep. Adam Hasner wrote a letter to Florida Department of Transportation Secretary Denver Stutler this week asking whether the state could cancel CITGO's exclusive contract to sell fuel at turnpike service stations, according to a separate Associated Press report. Hasner also sent a copy to President Bush's brother, Florida Gov. Jeb Bush.
"We must send a clear message to Chavez, and the current government of Venezuela, that the state of Florida and our citizens will not support institutions that seek the destabilization of America and our institutions and freedoms," Hasner wrote.
"We're reviewing the letter," Florida DOT spokesperson Dick Kane told AP. Hasner said transportation officials were looking into the legal ramifications of breaking the contract.
CITGO has operated seven service stations at 45-mile intervals along the 312-mile turnpike since 1994.
Attempts by CSP to contact a CITGO official on both issues were unsuccessful by deadline.
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