Oh Thank Heaven for 7-Eleven Dropping Citgo

By Mick Gregory – California-based Tower Energy is going national big time. This is a very big news story,  but did you read about it in the major mainstream media? The company this month begins the huge energy deal that will soon have them providing fuel to several thousand 7-Eleven stations, boosting its volumes by nearly 100,000 barrels per day (b/d). It is replacing the Citgo brand of gas at thousands of 7-Eleven stations with ExxonMobil, Valero and others. Tower will take over virtually all of 7- Eleven gas supplies as Citgo is dropped.  The private company expects to see sales exceed $3-billion in 2006, and that number could surpass $6 billion next year.

The upside for average Americans is the profit goes to Americans and they reinvest in their communities, rather than billions of dollars  going to Hugo Chavez and his friends through Citgo. Huge numbers like these could put Tower in the top 30 of the Forbes list of the largest privately-held U.S. companies. Between now and Sept. 30, Tower will take over the supply for 7-Eleven stations across America including  the Northeast, Mid- Atlantic, Midwest, Texas, and Florida. Tower currently supplies Utah and Colorado sites, those two states will get their gasoline from Sinclair and Frontier when new contracts kick in. With the exception of that Rockies, Tower will be the coast-to-coast gasoline provider of about 95,000 b/d for the 7-Eleven chain. The logistics are intimidating but Tower will rely on common carriers such as Kenan and PCT to provide gasoline that Citgo had delivered in the past. Tower will get a large portion of its unbranded gasoline from ExxonMobil, and has also contracted with other large and midsized refiners, including Valero, representatives said.

So now we see why Hugo Chavez is on a whirl-wind tour, signing contracts with the despots of the world for his gas

Most communists skipped business school. The Citgo-PDVSA tankers going to China will take 40 days, as compared to three to four days across the Gulf of Mexico. Chavez will lose $6-$8 a barrel on that deal. Maybe more, because of the empty return trips of the expensive tankers.

I can almost hear a “big gulp” from Chavez and his Marxist friends As the public becomes aware of where Citgo profits are going, they will vote with their gas and convenience store purchases, but more importantly, the large fuel suppliers with business management and research  are dropping Citgo by the thousands,  making it a very easy for consumers to pass Citgo stations.  And the threat that Chavez had of halting America’s gas supplies, spiking retail prices and crushing the US economy begin to fade away.  Eventually, PDVSA will have to drop the Citgo brand and only sell on the spot market. We could soon see gas prices easing. Instead of Citgo’s gas traders trying to pump up the price on the open market, they will have to sell their unbranded, sour, heavy crude, lower. How sweet it is! What is that a giant Slurpee sound I hear? Hugo’s Citgo is almost Cit-gone.