LOS ANGELES -- A group of lessee dealers in Los Angeles told a federal judge Monday three major oil companies have fixed prices and raised rents in a bid to drive them out of business.
The dealers claim that Shell Oil Co., Texaco Inc. and Saudi Refining Inc. have conspired to fix prices since 1998 through Equiva Services LLC. According to the dealers, the joint venture violates antitrust law and is forcing dealers out of business across the country.
“Fix the price, raise the rent, and you get rid of the dealers,” Fred Dagher, who operates six stations in Los Angeles, told the Associated Press. “Then you can control the price of gas with one phone call.”
Before the joint venture, there were 2,500 independent dealers across the country. Today there are 1,100, said Dagher, who operated 13 locations himself 2 1/2 years ago. “What hurt these stations is the gas companies, not the economy,” he said.
Cameron Smyth, a spokesman for Equiva, said the joint venture was formed to improve marketing efficiencies, and the alliance is confident the judge will rule in its favor.
Lawyers for both sides presented depositions Monday. Details of the filings were restricted by a confidentiality order. They represent the first major step forward in the case, which was filed in June 1999.
Dagher said average monthly rents for independent service station operators have increased to $8,900 from $2,500 in 1998.
Joseph Alioto, the attorney representing the independent dealers, said outside court that the members of Equiva increased prices they charged independent dealers between 25 cents and 40 cents per gallon in 1998. At the time, crude oil cost about $10 a barrel, the lowest price since the Depression, he said.
"Damages will be quite substantial," he said.
The 39 dealers named as plaintiffs in the suit are seeking class-action status.
