Drivers in New Jersey and Pennsylvania will get a shock today when they pull in to Lukoil filling stations and find that the advertised price per gallon is over $8.
But that price has been set to draw attention to the fact that Lukoil is "killing" their franchises by charging outrageous prices that won't allow for owners to compete with neighboring gas stations, owners say, and is simply for show. The actual price at the pump is far lower at around $3.79 per gallon.
"We are doing this because we are dying," said Khaled Kezbari, owner of three New Jersey Lukoil stations. "Lukoil is charging us costs higher than the retail market. How can you compete? You cannot compete in the market like that."
Sal Risalvato of the New Jersey Gasoline, Convenience, Automotive Association said, "They essentially sell the very same gasoline to stations in close proximity of each other at different prices in order to game the market and compete with other gasoline brands," Risalvato said. "In doing so, the price may differ by as much as 25 cents a gallon, and place one retailer and the retailer's customers at an enormous disadvantage over another station."
Because franchise owners have no choice but to take out inflated prices on the customers, their sales have been dramatically affected. Kezbari says his stores alone have suffered around a 3,000 gallon loss per day as customers seek gasoline elsewhere.
However, he does admit that many of his customers are loyal ones to his franchise and are understanding about his position. His hope is that they will use their voices to complain to the company about the inflated prices.