- The Washington Times - Wednesday, September 27, 2006

DALLAS (AP) — 7-Eleven Inc. is dropping Venezuela-backed Citgo as its gasoline supplier after more than 20 years.

7-Eleven officials said yesterday that the decision was partly motivated by politics.

Citgo Petroleum Corp. is a Houston subsidiary of Venezuela’s state-run oil company, and 7-Eleven expressed concern that anti-American comments by Venezuelan President Hugo Chavez might prompt motorists to fill up elsewhere.

Mr. Chavez, at the United Nations last week, called President Bush the “devil” and an “alcoholic.” The U.S. government has warned that Mr. Chavez is a destabilizing force in Latin America.

“Regardless of politics, we sympathize with many Americans’ concern over derogatory comments about our country and its leadership recently made by Venezuela’s president,” said 7-Eleven spokeswoman Margaret Chabris.

“Certainly Chavez’s position and statements over the past year or so didn’t tempt us to stay with Citgo,” she added.

After his Bush-bashing last week, Mr. Chavez was rebuked by Rep. Charles B. Rangel, New York Democrat and one of Mr. Bush’s harshest critics, as well as other prominent Democrats, including House Minority Leader Nancy Pelosi of California.

“You don’t come into my country, you don’t come into my congressional district and criticize my president,” Mr. Rangel said.

7-Eleven, which sells gasoline at 2,100 of its 5,300 U.S. stores, will now purchase fuel from several distributors, including Tower Energy Group of Torrance, Calif., Sinclair Oil Corp. of Salt Lake City and Frontier Oil Corp of Houston.

There are no 7-Eleven franchises that sell gas in the District. There are 75 in Maryland and 256 in Virginia, a 7-Eleven spokeswoman said.

Mrs. Chabris said 7-Eleven’s decision to sell its own brand was based on many factors, including Citgo’s decision this summer to stop supplying stations in parts of Texas and other states to focus on retailers closer to its refineries in Corpus Christi, Lake Charles, La., and Lemont, Ill.

But 7-Eleven had been considering creating its own brand of fuel since at least early last year, and some analysts suggested 7-Eleven may be hyping the political angle as a way to curry favor with U.S. consumers.

“This has nothing to do with Chavez,” said Oil Price Information Service director Tom Kloza. “[7-Eleven] just didn’t want to be tied to one supplier.”

Mr. Kloza said all 7-Eleven did was seek out suppliers that could sell it the cheapest fuel, and “that was not Citgo.”

Citgo spokesman Fernando Garay declined to comment on whether Mr. Chavez’s comments had a bearing on 7-Eleven’s change in suppliers. He said the break was “a mutual agreement of the two companies.”

He said 7-Eleven was a “significant” part of Citgo’s retail presence in Texas and Florida. “It was a valued relationship,” he said.

In July, Citgo decided to stop distributing gasoline to 1,800 independently owned U.S. stations because it was a lackluster segment of its business.

To meet service contracts at 13,100 Citgo-branded stations across the country, Citgo had to purchase 130,000 barrels a day from third parties — a less profitable business model than selling gasoline directly from its refineries.

Citgo was founded in 1910 as the Cities Service Co., according to the company Web site, and 7-Eleven’s predecessor, the Southland Corp., bought Citgo from Occidental Petroleum in 1983.

Southland sold half its interest in Citgo in 1986 and the remaining stake in 1990 to Petroleos de Venezuela SA.

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