D.C. AG Sues ExxonMobil, Mamo
Published in CSP Daily News
Seeks to end distributors' exclusive-supply agreements
WASHINGTON -- The District of Columbia has filed a lawsuit against ExxonMobil Oil Corp. and its gasoline distributors for Washington, D.C.--including Virginia businessman Eyob "Joe" Mamo--to stop enforcement of exclusive-supply agreements that make one group of affiliated distributors the only suppliers of Exxon-branded gasoline in D.C., the district's attorney general, Irvin B. Nathan, has announced.
The complaint, filed in D.C. Superior Court, alleges that the exclusive-supply agreements violate the district's Retail Service Station Act.
The affiliated distributors--Mamo's companies Capitol Petroleum Group LLC, Anacostia Realty LLC and Springfield Petroleum Realty LLC--are the exclusive gasoline suppliers for about 60% of the 107 gas stations in Washington, including all 31 Exxon stations, 19 of 20 Shell stations, all 12 Valero stations and three unbranded stations.
The district's lawsuit challenges agreements that make these affiliated distributors the exclusive suppliers of Exxon-branded gasoline for the 27 independently-operated Exxon stations in Washington, or about 25% of the stations in the city.
ExxonMobil established the exclusive-supply agreements, or earlier versions of them, and transferred them in 2009 to the affiliated distributors, along with ExxonMobil's ownership of the 30 D.C. Exxon stations to which the agreements then pertained.
According to the district's complaint, these supply agreements can now be enforced either by the affiliated distributors or by ExxonMobil through its separate agreements with other area distributors.
The district alleges that the exclusive-supply agreements allow the affiliated distributors to "set the wholesale prices paid for Exxon-branded gasoline in D.C., depriving D.C. residents ... of the benefits of competition in the wholesale supply of Exxon-branded gasoline."
Mamo has long protested that his prices are reasonable, that exclusive-supply contracts are the industry "norm" and that he has been scapegoated for rising global oil prices, reported The Washington Post.
"The District of Columbia is targeting distributors for legitimate operating agreements that have been in place for years and are lawful under the District’s Retail Service Station Act," Mamo said in a statement provided to CSP Daily News on Wednesday. "These agreements are not the type of exclusive agreements that are prohibited by D.C. law. We will defend against these allegations and look forward to finally bringing this matter to an end."
ExxonMobil did not return the paper's request for a comment on the case.
Click here to view the full report and court documents. The newspaper featured Mamo in Feb. 2011.
Nathan investigated Mamo in May 2011, looking into allegations that Capitol Petroleum Group Inc. was engaging in practices that could be leading to inflated pump prices.