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January 29, 2013

Petron Terminates Contracts of 21 Service Station Dealers for "Dumping"

Leading oil player Petron Corporation reported that it had terminated the contracts of 21 service station dealers for “dumping” activities. The company said that it ended its partnerships with these service station dealers over a 12-month period from January 2012 to January 2013.

“Dumping” occurs when service stations obtain their fuel supply from other sources with questionable quality. These fuels are then passed off as Petron products to the detriment of the consuming public who unwittingly load their vehicles with sub-standard products.

“It is our duty to make sure the consuming public only gets Petron’s top-of-the-line fuel and lubricant products whenever they go to a Petron station. We do not tolerate these illegal activities and we will continue to go after unscrupulous dealers within our network to ensure the integrity of the Petron brand,” Vice-President for National Sales Archie B. Gupalor said.

Petron maintains the largest retail network in the oil industry with over 2,000 service stations across the country as of 2012.

The company added that it discovered the dumping activities of these service station dealers after a thorough investigation backed by regular readings of the station’s dispensing pumps, which showed that the quantity of products sold at the stations was greater than the quantity purchased by the dealers from Petron. Petron’s pumps are equipped with monitoring systems to determine the volume dispensed. This is regularly checked by Petron representatives as part of the company’s standard operating procedure.

To underscore the seriousness of its efforts to go after erring dealers, the company recently filed criminal charges against a dealer in Bogo City, Cebu. The Bogo City Prosecutor’s Office found probable cause on allegations by Petron that the dealer committed criminal acts of trademark infringement, unfair competition, and false designation of origin punished under RA 8293.

“From jurisprudence, unfair competition has been defined as the passing off or attempting to pass off upon the public of the goods or business of the one person as the goods or business of another with the end and probable effect of deceiving the public. The essential elements of unfair competition are: confusing similarity in the general appearance of the goods, and intent to deceive the public and defraud a competitor. All of these elements without a doubt exist in this case,” a resolution penned by Bogo Acting City Prosecutor Ivy A. Tejano stated.

If found guilty, the dealer faces imprisonment of up to five years and a fine of up to P200,000 for violating Sections 155, 168 and Subsection 169.1.

Over the past few years, the oil industry has been beset with unscrupulous activities including product adulteration and rampant smuggling. Unabated smuggling has caused illegal dumping wherein station dealers are enticed to get cheaper fuels and pass them off as branded products.

“We wish to reassure the motoring public that we have robust systems and procedures in place to detect and stop these illegal activities,” Mr. Gupalor added. “We continue to deploy the latest technologies and competent personnel at the service station level to ensure that consumers are getting what they pay for.”

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