Local News

State Files Suit Against Fuel Distributor

Posted October 10, 2005

— State Attorney General Roy Cooper is taking on a gas distributor who he accused of illegally conspiring to fix prices and trying to force at least one gas station to raise its prices.

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  • Cooper filed suit on Friday against fuel distributors McLeod Oil Company, Inc. and Home Oil, Inc., of Mebane, and their manager Wesley C. Mehring, of Burlington, alleging that the defendants fixed the price of gas sold in Durham County and sought to coerce a local gas station to raise its prices.

    Cooper is asking the court to block the companies' illegal practices, to fine the defendants $5,000 for each violation and to require the companies to give up any illegal profits.

    "I won't stand for a gas supplier leaning on a local station to hike prices," Cooper said. "Consumers and businesses are already paying more than ever before for gas. They don't need gas prices hiked even more by somebody trying to make a fast buck."

    According to the complaint, McLeod Oil Company and its affiliate, Home Oil, Inc., have an agreement to supply gas to A&P Mini Mart located on Glenn School Road in Durham.

    Under their agreement, with each shipment of gas, McLeod provides Steven M. Grover, who runs the Mini Mart, with a range of suggested prices and what the gas station's share of the revenue would be at each price level. Grover typically selects the lowest price listed.

    According to Grover's affidavit, representatives from McLeod came to his store on Sept. 28 and demanded that he immediately raise gas prices by 40 cents a gallon. McLeod told Grover that competing gas stations also supplied by McLeod were angry with A&P Mini Mart's low prices, and that Grover needed to be "in the ballpark" of the other stations' prices.

    Grover refused to hike his prices. He later found out from a Mini Mart employee that McLeod had padlocked the gas pumps.

    The next week, as explained in the affidavit, another representative from McLeod's came by the A&P Mini Mart and asked if the store was ready to "get with the program and raise your prices." Two days later, McLeod removed all of the gas from the underground tanks at A&P Mini Mart.

    After Cooper's office filed suit on Friday, the defendants agreed to remove the padlocks at A&P Mini Mart by noon Monday and supply the station with gas.

    Cooper said he asked the Federal Trade Commission in Washington D.C. for help investigating at the oil company level. He is also working with 40 other attorneys general to investigate illegal activity.

    North Carolina is one of 10 states with the most gouging complaints. The others include Georgia, New York, Pennsylvania, Texas, Illinois, New Jersey, Michigan and South Carolina.

    Anyone who can prove a gas station is gouging prices in North Carolina should call




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