After New Jersey Division of Consumer Affairs Investigation, CITGO Agrees to Pay $450,000 Fine, Implement Compliance Program to Resolve Allegations of Sales of Unbranded and Off-Brand Fuel in Violation of Motor Fuels Act
NEWARK – Attorney General Christopher S. Porrino and the Division of Consumer Affairs announce that Texas-based CITGO Petroleum Corporation (“CITGO”), a large international motor-fuel refiner, transporter and marketer, has agreed to pay $456,610 and implement a compliance program after an investigation by the Division, through its Office of Consumer Protection and Office of Weights and Measures, found violations of the Motor Fuels Act, the Consumer Fraud Act and the Advertising Regulations.
The State alleged that a number of CITGO’s retail-dealers had been selling unbranded or off-brand gasoline as CITGO motor fuel, in violation of the Motor Fuels Act. To resolve these and other allegations, CITGO entered into a Consent Order with the Division that addresses motor fuel brand integrity among all CITGO-affiliated distributors and retail-dealers operating in New Jersey.
Under the terms of the Consent Order, CITGO will hold a Motor Fuel Brand Integrity training session with its distributors and the Division, conduct quarterly audits of retail-dealers for brand integrity, and designate a corporate brand integrity monitor. These terms are intended to ensure that only CITGO motor fuels are delivered to CITGO retail-dealers, and that these locations sell only CITGO motor fuels to consumers.
“The State of New Jersey takes very seriously its obligation to protect consumers from deceptive practices,” said Attorney General Porrino. “This Consent Order helps to ensure that consumers purchasing CITGO gas receive exactly what they expect and are paying for.”
“When consumers choose to purchase a brand, whether its gasoline or some other product, they often pay a premium for that brand,” said Steve Lee, Director of the Division of Consumer Affairs. “The Division will take every necessary step to ensure that consumers who make such choices are protected from bait-and-switch tactics and any other violations of state consumer protection laws.”
In 2014, the Division obtained bills of lading, invoices and fuel delivery tickets from earlier in that year from various CITGO retail-dealers in New Jersey. The documents demonstrated that at least 14 of the retail-dealers were selling a significant quantity of unbranded or off-brand motor fuel. The retail-dealers investigated were from as far north as Mahwah and as far south as Millville.
In addition, the Division reviewed CITGO television and digital advertisements which represented that fuel sold at CITGO retail-dealers was CITGO’s TriCLEAN gasoline, not unbranded or off-brand gasoline. The advertisements further touted the advantages of TriCLEAN gasoline as “designed to keep intake valves and fuel injectors clean, and emissions to a minimum, which helps your engine avoid performance robbing deposits and run smoothly.”
Enforcement Supervisor John McGuire, of the Office of Weights and Measures, directed the investigation, aided by Supervising Investigator Joseph Singh. The following Office of Weights and Measures inspectors also assisted: Kathy Belknap, Jason Flint, James Logothetis, Veatrece Newton, Kyle Pierson, Richard Pluymers, and Yocelin Tejada.
Deputy Attorneys General Russell M. Smith Jr. and Jeffrey Koziar of the Consumer Fraud Prosecution Section within the Division of Law, represented the Division.
Scott C. Solberg, of Elmer Stahl LLP, was the attorney for CITGO.
###
