Puma challenges gasoline law

By The Star Staff

Puma Energy Caribe LLC is challenging in U.S. District Court the constitutionality of Law 60 of 2020, or Puerto Rico’s Gasoline Law, arguing that it violates the Commerce Clause, is pre-empted by the federal Petroleum Marketing Practices Act and takes Puma’s property without just compensation.

The suit was filed Wednesday against Gov. Wanda Vázquez Garced and other officials. Puma seeks a declaratory relief and an injunction against the enforcement of Law 60. In the alternative, Puma seeks an award of money damages as compensation for the taking of its property.

Until recently, Puma had plans to build another 62 convenience stores on the contested properties. Puma invested in the properties based on the expectation of exercising significant operational control over those other businesses.

On June 27, Puerto Rico enacted Law 60, which prohibits Puma from exercising any operational control over other businesses on its property, the suit says. The law, in essence, bars wholesalers from operating other businesses at gasoline stations.

“This law is a purely protectionist measure. It was intended to devastate Puma’s business plans because Puma is an off-island company,” the suit says. “It was intended to protect local businesses from control by, and competition from, off-island wholesalers. Law 60 is having just these intended effects.”

Puma says the direct beneficiaries of Law 60 are locally owned businesses — among them, the gasoline retailers whose trade association was the moving force behind Law 60.

“The key sponsor of Law 60, Senator Carmelo Ríos, stated that the purpose of Law 60 was to ‘protect the ‘people who are from here’ from off-island wholesalers who would, he warned, remove Puerto Ricans from jobs, ‘stifle each and every one of the locals,’ bring in ‘people from Central America,’ and ‘pull millions of dollars out of the [local] economy,’” the suit says.

“Law 60 does not benefit Puerto Rico’s consumers. On the contrary, it reduces consumer choice,” Puma said. “By barring wholesalers from operating or controlling the other businesses at gasoline service stations, Law 60 effectively picks winners in these retail marketplaces. Law 60 takes these choices away from consumers. Law 60 will also harm Puerto Rico’s economy because, like all protectionist laws, it deters off-island wholesalers from investing in Puerto Rico.”

By deterring investment in these markets, Law 60 will reduce the number and quality of Puerto Rico’s gasoline service stations and of the other businesses provided on the premises of those stations, Puma said. Because of Law 60, Puerto Rico’s consumers will have less choice, will receive less value, and will be charged more, the gasoline wholesaler said.

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