Verona LukOil Hikes Price to $8.89/gal

Harjinder Kehal, owner of the LukOil gas station at 655 Bloomfield Ave. in Verona, has seen it all in his 15 years as gasoline franchise dealer in Verona. That is, until this morning. At around 10:30 today, Kehal joined about 50 other LukOil's around the state setting the price of gasoline on his pumps at more than $8 a gallon to protest the extra 5 to 20 cents LukOil suppliers charge franchisees. Things have gotten so severe for Kehal, he’s decided to close the station for good in the near future. “When I pulled up I thought they had made a mistake and put the wrong numbers up,” said Verona resident Judy Reilly. “I'm going to the other station.” Since LukOil sets the prices, Kehal is at the company's mercy to charge whatever they set for gasoline, which he says is usually about 20 cents higher than their competitors. Kehal bought the station 15 years ago, back when it was Mobil, and used to sell about 120,000 gallons of gas every month. Today, as a LukOil franchisee, he sells roughly 50,000 gallons per month. “If I want to match the prices of other stations, then I make six cents on every gallon of regular gasoline,” said Kehal. “I would only make $3,000 on 50,000 gallons of gas. That's not even enough to pay my employees.” Kehal owns a total of six franchises throughout the state and has already lost $200,000 combined, $50,000 more than he originally paid for his Mobil franchise. That, he explains, is why he will be closing down his Verona location for good. “I can't do it anymore,” he said. “I am losing $5,000 a month at this station alone.” Kehal has seen many changes in ownership and mergers over the years including Mobil, Exxon-Mobil, Tosco, which then became Tosco-Phillips before being bought out by LukOil. He and many other franchise dealers protested the company from the start. “When LukOil came in five years ago, they said they would provide us with refined gasoline from Russia, which would give us a better price, but that never happened,” he added. Then about three years ago, he said, they began charging him 10 percent more on his rent every year on top of his $2,000 a month real estate tax. Since he is already losing money Kehal could only raise the prices in protest at one other location. All day, he and his employees have been turning away customers, explaining the situation and handing them a flier. Of course they are welcome to pay the $8.89 per gallon, but none have. Customers were pulling away from the pumps saying such phrases as “It's ridiculous!” or “It's outrageous!” Some were slightly more sympathetic. “It's crazy,” said one customer looking to fill up his truck. “You gotta do what you gotta do, but I'm going to get gas up the road.” Kehal and his wife have been working about 60 to 80 hours a week running their stations but their Verona LukOil just isn't pulling its weight and he will be closing down at the end of the month. “I feel bad for Danny,” said Kehal referring to the mechanic at his location, who will also have to close at the end of the month. “He has been here seven years and everyone knows him.” “We just hope they (LukOil) will treat us a little better after this,” he added.