Gasoline Price Fixing Lawsuit

On November 13, 2006, five companies that purchased gasoline filed an antitrust class action lawsuit alleging that CITGO Petroleum Corporation conspired with OPEC to fix the price of gasoline in the United States. The action is entitled Spectrum Stores v. CITGO. The plaintiffs seek to represent a class of all businesses in the U.S. that purchased gasoline directly from CITGO since 2002.

Soon thereafter similar lawsuits were filed in Illinois, Ohio, and the District of Columbia. Although each complaint names CITGO as a defendant, these cases also named additional defendants, including Saudi Aramco, the Saudi Arabian government's oil company, and Motiva, the Russian government's oil company.

On December 18, 2007, the United States Judicial Panel on Multidistrict Litigation transferred all cases to the federal court in Houston, and consolidated them for pretrial proceedings. The cases are proceeding under the case name In re: Refined Petroleum Products Antitrust Litigation (MDL No. 1886).

Plaintiffs' Allegations in the Spectrum Stores v. CITGO Price Fixing Lawsuit

The lawsuit has been brought under the Federal antitrust laws. In summary, plaintiffs allege:

1) OPEC, an international cartel whose eleven member nations control most of the world's proven oil reserves, conspired to set limits on the production of oil to raise, fix, and stabilize world oil prices above competitive levels, thus increasing the prices of gasoline and other oil-based products, such as lubricants, motor oil, and asphalt, throughout the United States.

2) Defendant CITGO is wholly owned and controlled by the Bolivarian Republic of Venezuela ("Venezuela"), through Petróleos de Venezuela, S.A. ("PDVSA"), Venezuela's national oil company, and its affiliates.

3) CITGO purchases huge quantities of Venezuelan oil – over half a million barrels a day. In turn, CITGO refines the Venezuelan oil into gasoline and other oil-based products, and sells these products directly to plaintiffs and the class throughout the continental United States.

4) CITGO has violated federal antitrust laws in at least three ways:

First, CITGO entered into an agreement with OPEC and its members to assist the cartel's price-fixing scheme by providing analyses of American oil markets and other information important to the cartel's success, preparing OPEC's long-term strategy, organizing OPEC summits, and providing speakers at OPEC conferences.

Second, CITGO has entered into an anticompetitive agreement and conspiracy with Venezuela and PDVSA to assist and facilitate their sale of oil-based products to American customers at anticompetitive prices.

For example, CITGO (a) has spent hundreds of millions of dollars on retrofitting its refineries to enable it to refine and process huge quantities of Venezuela's heavy and relatively impure crude oil; (b) has entered into one-sided contracts that benefit Venezuela by allowing shipments of crude to be curtailed whenever Venezuela and other OPEC members reduce output to increase prices; and (c) has allowed Venezuela and PDVSA to breach their contractual obligations to CITGO with impunity.

Third and finally, Venezuela and OPEC have used CITGO as their instrument within U.S. territory for the purpose and with the effect of selling oil-based products to American consumers at supra-competitive prices.

Plaintiffs seek to recover for themselves and the class the amount, trebled, of the overcharges collected by CITGO and its co-conspirators as a result of OPEC's artificial price restraint. Plaintiffs also request the Court enjoin CITGO from continuing to conspire with OPEC in the setting of the price of gasoline and other oil-based products sold in the United States. Read a copy of the Spectrum Stores complaint.

Plaintiffs' Allegations in Fastbreak Foods v. Saudi Arabian Oil Co.

On February 8, 2008, other plaintiffs filed a complaint, entitled Fastbreak Foods v. Saudi Arabian Oil Co.

The complaint brings only one count under Section 1 of the Sherman Act. It alleges the existence of a conspiracy to fix prices by domestic and foreign companies, including many of the same acts in furtherance of the conspiracy noted in the Spectrum Complaint. However, it differs from the Spectrum Complaint in certain ways.

While the Spectrum Complaint names only CITGO as a conspirator, the Consolidated Complaint is brought against CITGO and also against its ultimate corporate parent, Petroleos de Venezuela, S.A. ("PDVSA"), and other PDVSA subsidiaries. The Consolidated Complaint also joins two other vertically integrated refined petroleum product producers: Saudi Arabian Oil Co. ("Saudi Aramco") and OAO Lukoil ("Lukoil"), and each of their subsidiaries that are in the chain of refined petroleum product ("RPP") production and distribution to the U.S. market.

The complaint alleges that these conglomerates started life as governmental operations of their respective home states. In time, they moved forth from their own national territories and engaged in business operations and oil field exploitation in other countries around the world. Fairly recently in their histories, they completed their final steps to directly supply the U.S. market with refined petroleum products by acquiring controlling interests in U.S. companies. Saudi Aramco formed Saudi Refining in 1988 and formed Motiva in 1998. In 1986, PDVSA acquired CITGO, and, in 2000, Lukoil acquired Getty.

The complaint also reflects the existence and role played by OPEC, not as the face of the alleged conspiracy, but as a private industry association among others where the defendants' agents and representatives met and discussed supply levels and prices for refined petroleum products.

The complaint alleges a number of mechanisms by which the defendants implemented their supply and pricing agreements, including the manipulation of their refining capacities, withholding oil from refineries, making false announcements about planned pumping reductions and other means to create shortages. Read a copy of the Fastbreak Foods complaint.

Case Status

The defendants have moved to dismiss the cases. Among other things, the defendants argue that United States courts lack jurisdiction under the Act of State Doctrine because the actions at issue were sovereign Acts of State taken within the state's territory. Read Defendants' brief. The motion is pending.

Plaintiffs disagree, and argue that the federal court has jurisdiction over CITGO, because the oil company’s primary place of business is located in the United States, because it owns and runs refineries in the United States, and because it sells the refined petroleum in the United States. Read Plaintiffs' opposition.

On January 9, 2009, U.S. District Court Judge Sim Lake granted defendants' motion to dismiss the action for lack of subject matter jurisdiction under the act of state and political question doctrines. Read the court order.

Contact Plaintiffs' Counsel

Companies that have purchased oil directly from CITGO are welcome to contact plaintiffs' counsel in the Spectrum Stores v. CITGO price-fixing lawsuit. We welcome the opportunity to answer your questions and learn of your experiences with CITGO.

All information submitted will be held in confidence as provided under the law. There is no charge or obligation for plaintiffs' review of your complaint.

Please note: Consumers who purchase gas from CITGO stations are not part of the proposed class and should not contact counsel. CITGO stations are independently owned, and purchasing gasoline from a station does not constitute a direct purchase from CITGO.