Flying J Petroleums Inc., the target of an anti-trust lawsuit brought by the Utah attorney general this week, said charges of scheming to monopolize the Ogden retail fuel market by selling gasoline below cost won't wash in court.
In a statement issued Thursday, the Brigham City-based company "emphatically denied" the charges of illegally undercutting the market, saying its competitors dictate its pricing of gasoline and diesel."To be competitive, Flying J, a less familiar trade name, cannot allow competitors to sell motor fuel at prices lower than its own," the company said. "The facts will show that Flying J has not sold motor fuel below cost in violation of the Utah Motor Fuel Marketing Act."
The 1981 act prohibits a gasoline retailer from selling fuel below its cost - the wholesale price of gasoline plus a 6 percent markup for operating expenses. Prosecutors must prove that the retailer was the first to sell below cost, while competitors that follow suit aren't in violation.
In a complaint filed in 3rd District Court, the attorney general accused Flying J's truck stop at 1206 W. 2100 South in Ogden of violating the act for eight days in June.
But the oil refinery and retailer contends that its Ogden Travel Plaza located off I-15 competes with other truck stops as far as 150 miles away. The company said many of its interstate competitors offer unadvertised discounts to select customers.
But Flying J's policy and practice is to advertise and offer its competitors' unadvertised discounted price to everyone, and not just select customers, the company said.
Its written statement also accuses Attorney General Paul Van Dam of speaking out of both sides of his mouth by saying he is protecting consumers against rising gasoline prices.
"Flying J finds it ironic that in one breath the attorney general is publicly charging all oil companies with price gouging because of the recent rise in motor fuel prices and then, in the next breath, is trying to force Flying J and others to raise their fuel prices."
But the state contends Flying J's below-cost pricing could result in higher prices as it forces smaller competitors out of business. Smaller independent service stations don't have the refining resources of Flying J to offset losses incurred by selling below cost. Nor can the independent station afford to raise its prices and lose customers, the state said.