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7-Eleven dumps CITGO from its stores
AP Photo/LM Otero
Wednesday, Sept. 27, 2006. Convenience store operator 7-Eleven Inc . announced is decision of dropping Venezuela-backed Citgo as its gasoline supplier at more than 2,100 locations and switching to its own brand of fuel.By Elio Ohep
Petroleumworld
CARACAS
Petroleumworld.com 09 28 06US convenience store chain Dallas base 7-Eleven said Wednesday it was dropping Venezuela-backed CITGO Petroleum Corp. as its gasoline supplier on its 2100 stores in the U.S. The store chain 7-Eleven said it was ending a 20-year-old supply agreement with CITGO after last week "derogatory" comments by Venezuelan President Hugo Chavez at a United Nations speech.
Chavez called US President George W. Bush "the devil" in the speech and later called the American leader an "alcoholic" and a "sick man."
"Regardless of politics, we can sympathize with many Americans' concern over derogatory comments about our country and its leadership recently made by Venezuela's president Hugo Chavez," the company said in a statement.
The Dallas-based convenience store said that Torrance-based Tower Energy Group will deliver fuel to most of the 7-Eleven outlets that CITGO is losing.Chavez's comments also infuriated some Americans, prompting CITGO boycotts in some states and provoking a Boston politician to demand the removal of a large, lighted Citgo sign that is visible from Fenway Park and is a local landmark and an icon of pop culture.
CITGO has been owned by the Venezuelan state oil company, PDVSA since 1990, when the Latin American company bought out 50% from its partner to become the sole shareholder. Chavez became president in 1999.
However, CITGO, in a prepared statement, said that "earlier this year and after many months of deliberation, CITGO decided to allow its gasoline-supply contract with 7-Eleven to expire at the end of Sept. 2006. This decision was announced last July."
The statement added " 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.
Tom Kloza, chief oil analyst at the Oil Price Information Service, which monitors fuel markets, said the timing of 7-Eleven's announcement was opportunistic and reflecting on 7-Eleven's desire to make a very public break with CITGO.
"This was opportunistic," Kloza said, "When we were writing about this awhile ago … they were very quiet about it and there was no fanfare."
CITGO, based in Houston, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America, Inc., an indirect wholly owned subsidiary of Petróleos de Venezuela, S.A.- PDVSA, the national oil company of the Bolivarian Republic of Venezuela.
- Elio Ohep, editor@petroleumworld.com, 58 412 996 3730, Caracas.Petroleumworld 28 09 06
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