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Home News Prince George's County News Originally published November 06, 2013

Largo Exxon Prices Much More Than Average

Owner Admits Prices are ‘Too High’

by Zenitha Prince
Special to the AFRO

    Nicholas Smith is outraged by the gas price. (AFRO Photo/Avis Thomas-Lester)
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Nicholas Smith could hardly believe it. On his way to an appointment at Prince George’s Community College one recent morning, he stopped by the Campus Way Exxon gasoline station at the corner of Landover Road and Campus Way South, directly across the street from the Largo campus.

As he noticed the price at the pump, he did a double take. Campus Way Exxon was charging $4.79 for regular, $4.89 for plus unleaded and a whopping $4.99 for its supreme gasoline.

“That’s $1.30 more than I just paid the last time I bought gas!” said Smith, a freelance designer who lives and purchases his gas in Cheverly. “That is ridiculous. There is no way I’m paying that.”

John Townsend, a spokesman for AAA Mid-Atlantic, said he was familiar with the station.

“As a matter of fact, we get more complaints about that station than any other station in the region,” he said.

Patrick DeHaan, a senior petroleum analyst for Gasbuddy.com, a crowd-sourcing website that provides consumers with gas prices, said a spotter logged gas at the station at $4.79 per gallon on Sept. 8, the same price that was posted at the station dating back to Aug. 13.

At the same time, other stations priced gas from $3.35 to $3.79 per gallon, DeHaan said. Charging upwards of $1.30 per gallon more than the competition was a cause for concern, experts said. This week, the station’s prices ranged from $3.89 per gallon regular unleaded to $4.59 for premium—significantly higher than the average, both locally and nationally. Most stations in the area are running regular at 50-60 cents per gallon less.

A cashier who was working at the station on Sept. 9 provided a number to the owner, a “Mr. Ather.” A man who answered the telephone at the number said his first name was Ather, but refused to give his whole name. He said he has owned the gas station “for several” years. He said he owns four more—two others are in Prince George’s County. He did not say where the other stations were located.

Ather acknowledged that his prices are “too high.” He said the almost $5 per gallon prices resulted from him passing charges on to the consumer to make up what he pays the supplier.

“My cost is higher than other prices in that area because my supplier charges more,” he said. “Because the distributor was charging us a lot, we charge the customer what he is charging us.”

When asked why he stayed with that distributor, he said “because Exxon bonded me to buy from that supplier.”

Ather said his business is slow because of his high prices. When the AFRO stopped by to observe the station on at least five occasions, there were often no cars there or only one.

“I have no choice,” he said. In recent days, he has reduced the prices, though they are still much higher than other local stations.

The business owner identified his supply company as Capitol Petroleum Group. Currently, the company owns, operates or supplies about 200 Exxons and 40 Shells in the metropolitan Washington, D.C. region and in all five New York boroughs, according to its website.

Capitol CEO Eyob “Joe” Mamo owns half and supplies about 60 percent of the 107 gas stations in D.C., according to court documents.

D.C. Attorney General Irv Nathan two years go launched an investigation into Capitol Petroleum Group LLC, but decided not to file suit. But, late last month, the A.G.’s office filed a complaint against Mamo’s companies, challenging their “exclusive-supply agreements” with station owners on the basis that they allegedly violate D.C. gasoline sales laws, according to documents filed in the D.C. Superior Court.

The supply agreements make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., and their ability to set the wholesale prices paid for those products “deny independent retail dealers…and the many thousands of consumers D.C. who purchase such gasoline, the benefits of competition in the wholesale supply of Exxon-branded gasoline,” the complaint alleges.

“Under the District’s gasoline marketing law, a retail gasoline dealer is free to purchase a brand of gasoline from any supplier of the brand,” Attorney General Nathan said in a statement. “Our suit seeks to end these unlawful supply restrictions, increase wholesale competition, and bring down retail prices at the pump.”

A similar attempt to limit Mamo’s control over the local petrol industry—a bill that would prohibit “jobbers” or gasoline distributors from also running stations and remove the “exclusivity” from supply agreements—died in February 2012, after legislators tied 6 to 6 in a vote. Councilmember Mary Cheh, lead sponsor of the bill, AAA Mid-Atlantic, owners of several independent stations and antitrust experts contended that allowing distributors to operate stations increased gas prices, according to D.C. Council documents.

Townsend blamed Mamo.

“The D.C. Council bends over backwards for Joe Mamo because he’s Black,” said Townsend, who is African American. “…He and another distributor have a virtual duopoly on the District of Columbia…He is overcharging gas station owners.

Here you have a guy who is taking advantage of markets and he’s hurting poor people and Black people.”

A spokeswoman at Mamo’s office in Springfield refused to comment or make Mamo available. In his testimony before the council on Cheh’s bill, Mamo denied accusations of “price-gouging,” and questioned why he was being targeted.

Additionally, he, along with a petroleum distributors’ association, tenant operators of mini-marts located at Mamo’s gas stations and others argued that the bill would not result in lower gas prices, but could raise them.

No matter what happens with the lawsuit, officials said consumers need to make the owners who charge higher prices pay by making their fuel purchases elsewhere. Gasbuddy.com is a free app that can help direct consumers to stations with better prices, DeHaan said. The opening of a Costco in the District has also provided residents with an alternative to expensive prices, officials said.

“I tell people all the time to shop with their steering wheel,” Townsend said.

“There is nothing that says if someone is charging that much, you have to shop there. There are many, many stations where consumers can get a fair price for their gas.”

Executive Editor Avis Thomas-Lester contributed to this report.



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