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    CITGO Bites Back: Road Ranger Claims Are "Inaccurate"

    The petroleum marketer said that it complied with all contractual obligations to Road Ranger.

    HOUSTON -- Road Ranger's claims that CITGO Petroleum Corp. failed to supply gasoline, damaged the CITGO brand and dealt in bad faith, are "inaccurate" and "out of context," according to a statement by CITGO.

    In response to the former CITGO-branded marketer's allegations, as reported yesterday by CSNews Online, CITGO noted Road Ranger's assertions are counterclaims in a lawsuit originally filed by CITGO against Road Ranger in November 2007.

    "It is CITGO's policy not to discuss ongoing litigation," the petroleum marketer, based here, said in a statement. "However, the fact that Road Ranger issued a detailed press release on the case, showing inaccuracies and placing claims out of context, leaves us no choice but to provide some relevant information."

    In its rebuttal, CITGO said the refiner/marketer "has never in the company's history invoked force majeure on any branded gasoline customers. This naturally covers the period immediately following hurricane Rita in 2005."

    In its countersuit, Road Ranger, based in Rockford, Ill., claimed CITGO's Louisiana refinery was not seriously damaged by the storms, but, "CITGO nonetheless took the unprecedented, drastic step of declaring force majeure -- in effect, declaring that an act of God made it impossible for it to supply gasoline to Road Ranger. CITGO became an unreliable supplier of gasoline to Road Ranger, even though it had access to additional gasoline from Venezuela and the market."

    Road Ranger also asserted CITGO actions in the franchise renewal process "were dishonest and a pretext to ending a franchise relationship that CITGO no longer wanted, but could not legally terminate under the Petroleum Marketing Practices Act," according to the Midwestern c-store operator's suit. "CITGO deliberately designed the new contract to be so untenable that Road Ranger would not renew.

    CITGO, however, said during the term of its contract with Road Ranger, CITGO complied with all of its contractual obligations and all requirements under the Petroleum Marketing Practices Act (PMPA). "At the time of the negotiations between CITGO and Road Ranger, a process was under way to update existing standard contracts for all of the CITGO branded marketers. All marketers were requested to sign the new contracts," the petroleum marketers said in a statement.

    CITGO also denies that its parent company, Petroleos de Venezuela, S.A. (PDVSA) and ties to controversial Venezuela President Hugo Chavez hurt the value of its franchise marketers in the United States. "Venezuela’s huge crude oil reserves strengthens CITGO’s unique position to serve the U.S. market," it said.

    CITGO, based here, is a refiner, transporter and marketer of transportation fuels, lubricants, petrochemicals, refined waxes, asphalt and other industrial products. The company is owned by PDV America Inc., an indirect wholly owned subsidiary of Petroleos de Venezuela, S.A., the national oil company of the Bolivarian Republic of Venezuela.

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