Citgo to stop supplying fuel to some stations

| Thursday, July 13, 2006

The Venezuela-based oil company Citgo Petroleum Corp. is planning to stop distributing gasoline to 1,800 independent retail outlets in the U.S.

The Associated Press reported that the company made the move as a cost-cutting measure. The company currently has to buy 130,000 barrels of fuel per day from third parties to supply more than 13,000 stations in the U.S.

Instead, the company will sell retailers the 750,000 barrels per day that it produces in its three U.S. refineries. Because that won’t leave enough to go around, the 1,800 independent retailers have been cut off from the supply chain.

The move will affect retailers in 10 states. Iowa, Kansas, Kentucky, Minnesota, Missouri, Nebraska, North Dakota, Ohio, Oklahoma and South Dakota will be completely cut off from Citgo supplies. Some stations in Illinois, Texas and Arkansas will also be affected.

Though it could cause some problems for those retailers affected, The AP reported that the move is not expected to have a significant impact on the overall fuel supply in the country.

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