Circle K drops Venezuelan-owned Citgo gas and goes with Valero

By Mick Gregory — Why isn’t your mainstream media reporting this?

Updated: Oct. 9, 2008

Marathon Oil Corp. purchased four Citgo oil terminals in Ohio, including a facility in Dayton.

The Houston-based company owned by PDVSA, the nationalized oil company of Venezuela said it reached an agreement to sell the four terminals in Ohio and sell ownership interest in Inland Pipeline. This was announced nearly a year ago. After the deal closed at the end of 2007, the Marathon company will own facilities in Dayton, Dublin, Tallmadge, near Akron, and Oregon, near Toledo.

The pipeline Marathon is picking up in the deal has two origination points in northeast Ohio and supplies six terminals throughout the state.

Companies are conducting research and finding that Americans don’t want to buy their gas from a Communist dictator in Venezuela – Hugo Chavez – El Presidente of the 100 percent state-owned Citgo gasoline brand. I think people would like to know that San Antonio-based Valero will replace Citgo as the gasoline brand at all the Circle K stations in the Rio Grande Valley, more than 300 locations. Valero, the largest U.S. refiner, announced last week with a press release that it had signed an 11-year agreement with Susser Petroleum Company to supply gas to all of its retail stores in Texas and Oklahoma operated by Susser’s retail unit. Susser sells fuel primarily under the Citgo brand, but with the new agreement most of its stations will take on the Valero brand. This shows brilliant proactive management from both the Susser and Valero’s teams.

UPDATE 10/2007: And for true environmentalists, CITGO lost in court on on two EPA counts for endangering wildlife and humans at a refinery. CITGO Petroleum’s former environmental manager, Philip Vrazel was left off the indictments. Lucky for him, note that he is a former Citgo environmental manager.

CITGO half heartedly defended the accusations against the former employee, Mr. Vrazel but when the rubber hit the road, offered to plead no contest on behalf of the refinery.

The prosecution rejected this offer. At the time of the incident in 2003, the birds were recovered by CITGO, tagged and bagged, and voluntarily provided to agents of the Fish and Wildlife Department.

The trial exonerated CITGO for the deaths of 25 birds but found CITGO responsible for the deaths of 10 birds. CITGO insisted that Mr. Vrazel was not responsible, however, and the District Judge agreed, releasing Mr. Vrazel from all charges.

Valero is putting its name on the fuel stations, the popular Circle K store names will not change, only the Citgo signs will come down. The brand change is expected to begin immediately and you will see the Citgo signs coming down as early as September. The new signage could take up to a year to complete because of the large number of stations involved, but Valero reports to the industry that the changes will be made fast. Valero reports the deal is the largest single agreement with a single distributor in Valero history by fuel volume and number of sites, making Valero the No. 1 fuel marketer in Texas with a total of 1,900 locations. With the addition of the stations run by Susser, the largest independent convenience-store operator in Texas, Valero will have a total of about 5,500 sites in the U.S. and Canada. Last month, Venezuelan-owned and operated Citgo warned it would stop selling its gasoline to marketers that provide fuel at stores in several states. What that means is that stations in 14 states will have until next March to find new sources of gasoline, The Wall Street Journal reported. But the large groups of Susser stations were not on the list. Venezuelan President Hugo Chavez, an outspoken critic of America, had called for the discontinuation of contracts that benefit U.S. consumers more than Venezuelans, according to reports. Recent company promotions put Citgo stations at 14,000 last year, some analysts say that number is drastically falling and may be closer to 12,000 at year’s end because of the now unreliable fuel source, on top of a negative image of its real owners. Chavez is visiting China this week attempting to sign long-term contracts with China to make up the difference with from the fast-falling Citgo locations. At the same time, major jobbers with Citgo contracts are most likely scrambling to make new partnerships with Valero, Shell and Exon. Ironically, Citgo’s U.S. administrative offices are in Houston and their data processing operations are in Tulsa, Oklahoma. It’s going to be hard for them to buy gas with their employee discount cards. BTW – gas is about 12 cents a gallon in Venezuela, totally paid for by US consumers. Hello?