$10-a-gal. gas draws crowd
Despite the inflated prices - $9.88 for regular and $9.99 for premium - customers flocked to the Lukoil station at the intersection of Boot Road and Rt. 100 yesterday. Fortunately, most didn't come to fill up since there was no gas at any price. They just wanted to say good-by.
$10-a-gal. gas draws crowd
Despite the inflated prices - $9.88 for regular and $9.99 for premium — customers flocked to the Lukoil station at the intersection of Boot Road and Rt. 100 yesterday. Fortunately, most didn’t come to fill up since there was no gas at any price. They just wanted to say good-by. After 10 years, Ghanshyam Patel was walking away from his $300,000 investment and blaming Lukoil.
As soon as his pumps went dry, Patel, 50, of Norristown, posted the highest prices he could - given the number of digits the sign allowed — a protest he hoped would call attention to his predicament. “You are snatching the business from me,” he said he told company officials during one of the rare times he was able to communicate with them.
He said the company had been selling him gas for more than the street price, preventing him from being competitive and forcing him to close shop. He said other Lukoil franchisees had also gone out of business.
“That’s what they want,” he said, explaining that Lukoil owns the property and will likely reopen with new operators handpicked by the company. Among Patel’s last customers was another Lukoil franchisee who echoed Patel’s complaints. He said he had been struggling as well with the high prices he was charged and did not know how long he could hold out. A 2005 article in The Inquirer chronicled the complaints of other area franchisees who said Lukoil had set its wholesale prices too high for them to survive. In 2004, Lukoil, Russia's largest oil producer, bought more than 750 Mobil stations in New Jersey and Pennsylvania from ConocoPhillips for $266 million. The stations had been cut loose from Exxon Mobil Corp. in 2000 to satisify antitrust concerns.
Patel said he would really miss his customers, and it was clear from the reception he received yesterday that he had endeared himself to many. “My father [John] is really going to miss this place a lot,” said Jill Adamson. “This was a place he enjoyed coming to; he’d scratch off his lottery tickets and hang out.” As another customer approached the counter, Patel shook his head and apologized for being out of Bingo. “See?” said Adamson. “He knows what everybody wants.”
Patel, who said he valued customer service, said some of his most loyal patrons also bought gas at his station even though his prices were high, but others said they could not afford to pay so much more. “I only came here once, and that’s when I ran out of gas right up the road and coasted in here,” said Gil Montgomery, 27, of West Chester. “He was sometimes 17 cents higher than the Wawa; I could never understand why there was such a big difference.”
Patel said he believes there should not have been. He said he bought the franchise from Mobil in 2002 and enjoyed an excellent working relationship with Mobil. That situation changed dramatically in 2004 when Lukoil took over; since then, Patel said he struggled to stay afloat. Now, after 10 years of getting up before dawn to travel from Norristown to Exton to open the station at 5 a.m., he doesn’t know what he will do. He said his only son is a high-achieving high-school senior who deserves help with college tuition. “This isn’t right,” he said. “I operated safely, honestly and legally all this time … no bounced checks, no problems. The oil companies are making billions and I get forced out of business.” To hear Patel's own words, he has posted a video at http://www.youtube.com/watch?v=MK5zjDVdLDI.
Russian owned.....need we say more.— moretoit- I've always thought something was odd about Lukoil's pricing. For instance, at the Lukoil at Delaware & Spring Garden, the mid-range gas is 50 cents a gallon more than regular.... where at most gas stations a price difference of 10-20 cents.— justinnachod
- @phillyroll - I don't think you read the story clearly and perhaps don't understand how gas stations work. Lukoil is corruptively charging an inflated price to its licensees, who have no choice and cannot get out from under the control of Lukoil. It's an anti-competitive, anti-capitalist situation.— Truth B. Told
- Kathleen, if you want to dig deeper find out hpow Mr Patel purchased the station. Did he go through Atlantis Petroleum LLC and get his financing through American Enterprise Funding LLC? If he did, there lies the issue. He would have signed-on (whether disclosed or not) to a 10 year contact tohave Lukoil as his supplier. Also, when he purchased the station did he receive upfront rebranding (if the station wasn't already a Lukoil site) or renovation monies. That payback is also in the contract and some of the buyers aren't aware. Was the funding done properly, meaning was the site financials based on current business or an inflated number "after renovations"? Looking at how the buying and financing were done will add to the story, cause not only was Mr Patel wronged but the Small Business Administration (who backs up to 85% of the loan, packages the guaranteed portions of many loans and sells them as investments) was wronged and possibly defrauded. Please look deeper, trust me there is a story there.— bgleas103
- The point is : " He said the company had been selling him gas for more than the street price, preventing him from being competitive and forcing him to close shop" Who cares where he funded? Geez.
- Welcome to America bro. Having been a former pump monkey, I know the story all too well. The corner gas stations don't even really make profit off selling gas, because they get charged such a high price and they need to stay competitive in the area. They make money off of selling cigarettes and doing auto repairs, etc... The whole system is setup and controlled by Big Oil so they can control all the profits, determine who makes money off their oil and who doesn't.
Is that Free Market Economics Ronald??— KingOfPhilly - Don't buy Russian owned Luke Oil and they will be forced to lower their prices like Venezulian owned Citgo. It
doesn't hurt the owner because like Patel they are doomed to failure by Luke Oil.— delcopa - "In Soviet Russia, Companies Gas you"— sillybilly
Comment removed.- Our good old corrupt "namzer" politicians in action!!!!!!— WCJRJR
- There is almost no profit margin on gas alone with all the taxes piled on. If he was a good business man he would have sold other products that attracted customers which have a higher profit margin and he would still be in business today.— Taxpaying Voter
- He did. It's also a mini-market. There is a Wawa on the opposite corner. There WAS an independent Sun station across the street. That's gone, too. I've been here many times. He's a nice guy trying to make a living. Luk Oil has made it impossible for him. They want the spot for themselves.
— CCRichards - The Goverment forced Mobil to sell the station was the start of the problem .Get the goverment out of setting regulation and we all will be better off. Stop buying at Luk Oil everywhere and the Russian Oil Co will be forced to sell the stations to a USA company or some independent dealers.— hannigan
- Comment removed.
- Sure! The only money in Russia is either in the hands of the mob ... or the politicians. :-)
