Amended law strengthens ban on operation of gas stations by wholesalers

By John McPhaul

The Gasoline Retailers Association (ADGPR by its Spanish initials) announced Thursday that the amendments achieved by unanimous vote in both legislative bodies were approved by Gov. Wanda Vázquez Garced and became Law 60-2020, which entered into force on June 27 guaranteeing a level of competition between wholesalers and retailers of gasoline.

“Public policy is advanced to maintain broad competition in the retail sale of gasoline, preventing the operation of gasoline stations by oil producers,” said Rafael Mercado Ghigliotty, president of ADGPR, which groups more than 700 gasoline stations in Puerto Rico, in a written statement. “We are grateful to Gov. Wanda Vázquez for signing this law, and to the Senate and House of Representatives for the unanimous approval of the bill, at a time when the industry is so vulnerable and needs it most.”

At the close of the current legislative session, the last of the four-year electoral term, gasoline retailers managed to boost their industry with the approval of amendments to Law 3 of March 21, 1978, which regulates the gasoline industry in Puerto Rico.

With the approval of Law 60-2020, the legislation is updated to reaffirm the public policy of prohibiting the direct operation of gasoline stations by oil companies.

Among the amendments to Law 3 that were achieved through the new Law 60-2020 are:

* Redefine terms such as oil producer, wholesale distributor and retail service station to make their roles clear. With respect to retail service stations, activities that are now common in a station such as convenience stores, inspection stations and others are incorporated.

* Expand the definition of “operational decoupling” that prohibits refiners, oil producers or wholesale distributors from operating retail service stations. With the new definition, the activities that would violate the prohibition are clarified, such as imposing, fixing or limiting the profit margin, the retail price of gasoline, the products that can be sold at a retail service station and/or the price at which such products are sold.

* Establish a private cause of action for unfair competition when the Department of Justice’s Office of Monopolistic Affairs does not act on a complaint by a retailer for violation of the terms of the Law.

Known as the Law on Control of Petroleum Producers and Refiners and their Derivatives and of Wholesale Distributors of Gasoline and/or Special Motor Fuels, Law 3 prohibited the direct operation of gasoline stations by oil companies and required that the price of gasoline sold by wholesale distributors to retailers be uniform throughout Puerto Rico, among other provisions.

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