In-Brief

Gasoline retailers hail new law banning refineries from operating gas stations

The Gasoline Retailers Association praised the approval of amendments to Law 3 of 1978, which regulates Puerto Rico’s gasoline sector to ban refineries from directly operating gasoline stations on the island.

Among the amendments to the old law achieved through the new Law 60 of 2020 are:

  • Redefining terms such as oil producer, wholesale distributor and retail service station so that their roles are clear. With respect to retail service stations, activities that are now common stations such as convenience stores, inspection stations and others are incorporated.
  • Expand the definition of “operational decoupling” that prohibits refiners, oil producers or wholesale distributors from operating retail service stations. With the new definition, the activities that would violate the prohibition are cleared up, such as imposing, fixing or limiting the profit margin, the retail price of gasoline, the products that can be sold at a retail service station and/or the price at which said products are sold.
  • Establish a private cause of action for unfair competition when the Justice Department’s Office of Monopolistic Affairs does not act on a complaint by a retailer for violation of the terms of the Law.

“With this law, level competition between wholesalers and retailers is guaranteed, and public policy is moved forward to maintain broad competition in the retail sale of gasoline, avoiding the operation of gasoline stations by oil producers,” said Rafael Mercado, president of the trade group that has about 700 member gasoline stations.

Known as the Law to Control Petroleum Producers and Refiners and their Derivatives and of Wholesale Distributors of Gasoline and/or Special Motor Fuels, Law 3 prohibited the direct operation of gasoline stations by oil companies and required that the price of gasoline sold by wholesale distributors to retailers was uniform throughout Puerto Rico, among other issues.

Over the years, widespread business practices and changes in the way of doing business adversely affected the retail sale of gasoline and specialty fuels, the trade group said.

The Gasoline Retailers Association has been working for several years to achieve justice for consumers and for the sector, including maintaining a single pricing zone to spare consumers from having to pay higher prices for living in high-price areas.

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This story was written by our staff based on a press release.

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