Chevron Dealers Decry Possible Rent Increase

Chevron Corp. has told some service station operators that it will raise rents if dealer-backed legislation touted as increasing market competition passes. The dealers are upset and contend that their rents could double, thereby adding several cents to gasoline prices. Sen. Ron Wyden (D-Ore.) has called for an investigation by the Federal Trade Commission. Chevron acknowledged that it sent a letter to 860 dealers nationwide detailing a new lease agreement that would end subsidies if certain legislation passes, including Senate Bill 123, a bill in the California Legislature that would eliminate the practice of “zone” pricing and would require a uniform wholesale price for gasoline. The new lease agreement is necessary to comply with the legislation and to respond to market conditions, a Chevron spokesman said. Will Woods, executive director of an Irvine-based dealer trade group, called the move “extortion” and an attempt to squelch dealers’ rights to free speech. Chevron termed that claim “ridiculous” and said such legislation would cause gasoline prices to rise.