Gas Dealers Allege Conspiracy

A group of independent service station operators in Los Angeles told a federal judge Monday that three major oil companies have fixed prices and raised rents in a bid to drive them out of business.

The dealers charge that Shell Oil Co., ChevronTexaco Corp. and Saudi Refining Inc. have conspired to fix prices since 1998 under a joint venture, called Equiva Services, to refine and market their products.

The independent station operators, who rent their gas stations but own their businesses, claim 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. Then you can control the price of gas with one phone call,” Fred Dagher, who operates six stations in Los Angeles, said in an interview.

Before the joint venture, there were 2,500 independent dealers across the country. Today there are 1,100, said Dagher, who operated 13 locations two years ago.

“What hurt these stations is the gas companies, not the economy,” he said.

Cameron Smyth, a spokesman for Equiva, said the venture was formed to improve marketing efficiencies, and the alliance is confident the judge will rule in its favor.

Texaco Inc. left the alliance after receiving regulatory approval in September to merge with Chevron to form ChevronTexaco.

Lawyers for both sides presented depositions Monday. Details of the filings were restricted by a confidentiality order. They represent the first major step in the case, which was filed in June 1999.

Dagher said the average monthly rent for independent service station operators has increased to $8,900 from $2,500 in 1998.

The 39 dealers named as plaintiffs in the suit are seeking class-action status.