Texas AG accuses Woodlands-based company of diluting gasoline


AUSTIN, Texas — The Texas attorney general filed a lawsuit today accusing a gas station company of diluting medium- and premium-grade fuel with regular unleaded at 143 stations.

The lawsuit filed by Texas Attorney General Greg Abbott against Petroleum Wholesale L.P. and related defendants says they falsified octane levels, defrauded customers and violated the Texas Deceptive Trade Practices Act.

“Attorney General Greg Abbott is attempting to protect Texas taxpayers’ pocketbooks,” said Abbott spokeswoman Lauri Saathoff.

The lawsuit is the third enforcement action by the state against the company.

“The lawsuit filed by the Attorney General is frivolous by any measure” Stuart Lapp, the company’s general counsel, said in a statment. “It is without a basis in law or fact and is a vindictive prosecution of a responsible and respected family-owned company that provides employment for hundreds of people and has based its corporate headquarters in the Houston Area for nearly 30 years. We have always maintained the highest ethical standards and adamantly deny the company has done anything improper.”

Lapp said the company was not surprised by the lawsuit and added “Petroleum Wholesales never cheated consumers.”

The state is seeking a temporary and permanent injunction against the defendants to stop such activities. The state also is seeking civil penalties of up to $20,000 for each violation of the Texas Deceptive Trade Practices Act. Saathoff said it has not yet been determined how many penalties they will bring against the company.

The lawsuit said the attorney general’s office found that the defendants diluted fuel in more than 1,000 instances, with the majority of such “cross-dumping” incidents happening in and around Houston.

The incidents happened between 2005 and 2008. Abbott said in a news release that as of Thursday, the defendants haven’t provided the state with documents after 2008.

The defendants operate Sunmart Travel Centers & Convenience Stores and about 80 other service stations licensed by the state to sell fuel under branding agreements with three major fuel companies.

According to data released by the Texas attorney general’s office, 48 stations in the state that had 60 percent of their pumps out of compliance. Of those 48, 24 stations were in the Houston area. Five stations had all the pumps out of compliance.

Here are those stations with 100 percent non-compliance:

  • Mobil Sunmart, 1130 Freeport St., Houston
  • Sunmart, 9199 North Loop E., Houston
  • Sunmart, 5709 Lyons Ave., Houston
  • Sunmart, 9140 Eastex Fwy., Houston
  • Sunmart, 9404 North Fwy., Houston

The state also found the defendants were selling unbranded fuel at branded stations, where brand-name products with performance-enhancing additives are advertised. Abbott said the defendants hid this practice from the branded fuel providers.

Abbott’s office also found that the defendants were improperly selling conventional fuel instead of the reformulated fuel intended to reduce carbon-monoxide emissions that’s required by the federal Clean Air Act for areas like Houston that exceed certain air quality levels.

Last year, a Harris County jury returned a $30 million verdict against Petroleum Wholesale, accusing them of calibrating their gas pumps to deliver less than a full gallon of fuel. Saathoff said that although a judge then ordered a mistrial, the state has asked the newly appointed judge to overrule the mistrial and reinstate the jury verdict.

In 2009, Petroleum Wholesale was ordered to pay $100,000 for violating state identity theft prevention laws.

To see the Sunmart pumps in Houston, click here.

Associated Press

30 Responses

  1. eiioi says:

    Good one though.

  2. eiioi says:

    That’s ethanol, Newsworthy.

  3. Newsworthy says:

    The AG should go after the methanol business for diluting gasoline, they’ve been doing it for years.

  4. t4txt4tn says:

    Thing is, there seem to be plenty of people offering cheap gas, like Fuel Express or sometimes Valero… it makes you wonder if all the fuels marketing guys do this to some degree?

  5. cannedspaghetti says:

    What is going on? We don’t want any government interference in business. This is just capitalism at its finest. If the product is bad then people will shop elsewhere. Too bad about the costly repairs you might need on your car.

  6. Rick Lowell says:

    They may need to look at a Pasadena supplier.

  7. Vanityinsanity says:

    Good thing God didn’t strike anyone for lying in this report. I seriously doubt anyone at PWI can even spell ethical.

  8. ThereIsAGod says:

    They get away with it because john cook’s wife has a LOT of money

  9. I have never obtained any gasoline from the named defendants nor will I ever from this day forward.

    Thank God for justice.

  10. Zilch says:

    Sounds like a hanging offense to me.

  11. mikebone one says:

    Yes . the same Sunmart who calibrated their pumps crookedly.
    Why no Criminal CHARGES HERE OR BACK THEN?
    Somenthing stinks and it is not just Sun MArt.

  12. Cris says:

    I wager they were all owned my middle eastern people.

    • Nobabyno says:

      Ignorant anglo

    • ThereIsAGod says:

      Sunmart is owned by John cook. He leases the convenience store out, sells the lessee gasoline then tells the lessee how much to charge for each grade. the lessee makes .01 per gallon for reg unl, .015 per gallon for mid grade and .02 per gallon for super. You figure out who makes the money.

    • ThereIsAGod says:

      Sunmart is a privately held company. He leases the convenience store out, sells the lessee gasoline then tells the lessee how much to charge for each grade. the lessee makes .01 per gallon for reg unl, .015 per gallon for mid grade and .02 per gallon for super. You figure out who makes the money.

  13. Consumer Sam says:

    Then you will remember they weren’t found guilty, the case was thrown out due to The State’s error. You people don’t understand how much of your tax dollars are being wasted on this, The State is the crook here. Go look up Valero, they are #1 in the nation of being out of spec. If you want to catch one, catch them all.

  14. Omega 13 says:

    Notice the areas of town in which these five stations are found? I’m surprised anyone noticed.

  15. faithfulflunkie says:

    What again? Say it ain’t so? Bad Company~~~~bad Company….SunMart stores just don’t want to play fair. I hope now they will get more than a slap on the hand..maybe some tougher punishment is needed.

  16. KeJo says:

    Jail time for the station managers and anyone who profited, please.
    Any lawyers out there want another class-action? here you go.

  17. JB says:

    I guess I will quit going to those stations.

  18. Only the lowest of the low in our society would cheat like this. I’d like to see action taken against “people” not a soul-less corporation. It was a group of humans who did this, and they need to be put behind bars for a VERY long time.

  19. established.facts says:

    i’m glad i dont buy gas no more…

  20. Thomas Paine says:

    Wasn’t it also Sunmarts who were caught intentionally mis-calibrating their gas pumps a few years ago? These crooks need to be jailed for theft on a massive scale.

  21. Dale Lezon says:

    What do the dots’ different colors mean?

  22. locked says:

    Duh. How DO YOU think oil companies make 89 octane.