Fuel crunch may not ease for days, says wholesaler

Wednesday, August 31, 2005

The Road Ranger on S.R. 59 at S.R. 42 was out of fuel for several hours Tuesday night. It is now open for business .

The Brazil Times is running free ads for car poolers. Call 446-2216 for information.

What a difference a day makes, but when it comes to the fuel supply, 24 hours only means supplies are tighter than they were Monday afternoon.

"It seems the supply is tightening a bit more," Jim Owen, President of Spence/Banks Oil Co. in Terre Haute said Tuesday afternoon.

Monday morning, Owen learned that due to unknown hurricane damage to refineries on the Gulf Coast, Marathon Oil Co., had decided to no longer sell unbranded product to Spence/Banks and other wholesalers.

"Unbranded" refers to the practice of a brand name oil company, such as Marathon, selling branded product to gas stations that bear the company's name and unbranded product to other companies that sell the fuel under their own brand name.

Spence/Banks has 25-30 customers, including convenience stores that sell to the general public and municipalities that purchase the fuel for their fleets of police cars and other city- or county-owned vehicles.

Marathon has been Spence/Banks largest supplier. Spence/Banks relies on Marathon for 75-80 percent of its product, Owen said.

Owen disagrees with Marathon's decision.

"It's not fair to shut down unbranded sales," he said. "We're all customers."

As a result, Spence/Banks trucks are driving farther to pick up fuel to supply the company's customers. That increases the company's cost of doing business which is then passed on to its customers and to the consumer.

"We are doing our best to supply customers," he said. "We are getting fuel to them."

But, instead of filling a customer's underground tanks, Spence/Banks is distributing its dwindling supply among its customers and having to turn away new customers that cannot buy fuel from their regular sources.

Retail and wholesale prices rise as the cost per barrel of oil increases.

Although Owen is optimistic that the supply will increase, it may be after Labor Day before customers see it happen.

"That is a day by day, minute by minute decision," he said.

Respond to this story

Posting a comment requires free registration: