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December 3, 2009

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Jury finds oil giant cheated dealers out of $500 million

Tuesday, Feb. 20, 2001 | 11:10 a.m.

THE ASSOCIATED PRESS

MIAMI -- Exxon Corp. cheated 10,000 station owners in 35 states out of $500 million over a 12-year period by inflating wholesale fuel prices, a federal jury ruled today in awarding that amount.

The judge may decide later to add interest from the pricing program that ran from 1983 to 1994 and was supposed to tie fuel prices to retail prices on credit card purchases.

If interest is added, it would raise the verdict's value to $1 billion, said Eugene Stearns, attorney for station operators.

Exxon attorney Larry Stewart promised an appeal, saying, "We continue to believe that we provided the offset and gave dealers a very fair price and that ultimately on appeal Exxon's business practices will be vindicated."

The heart of the case was Exxon's creation of a discount-for-cash program, which charged cash customers a cheaper per-gallon price for gasoline but added 4 cents per gallon to the station owners' price.

In return, Exxon -- now Exxon Mobil Corp. -- promised to cut wholesale prices to make up for the credit card charge. Station operators claimed the offset was paid for only six months, and Exxon manipulated wholesale prices to erase it for the rest of the program without the owners realizing it.

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