Fuel dealers say they were misled

Font Size:
Default font size
Larger font size

Eastern North Dakota fuel dealers are riled by what they believe was a pipeline company's deception about unleaded gasoline supplies, saying it forced them to buy fuel from distant and costlier sources.

The director of the North Dakota Petroleum Marketers Association, Mike Rud, asked the state Public Service Commission on Wednesday to intervene in an argument with Magellan Midstream Partners L.P. of Tulsa, Okla. The company operates a pipeline that supplies fuel to petroleum terminals in Fargo and Grand Forks.

Gasoline supplies have been short across North Dakota in recent months, in part because of shutdowns of refineries that serve the region. Gov. John Hoeven has repeatedly waived a 15-hour workday limit for truckers that haul gasoline, to give drivers more time to obtain and deliver fuel.

Rud, in a letter to the PSC, said the fuel dealers' complaint focused on four days in August.

Magellan uses recorded telephone messages to provide updates of fuel availability. The message the morning of Friday, Aug. 17, said the Grand Forks terminal was out of unleaded gasoline and had no immediate prospects for getting more, Rud's letter said.

Early on Monday morning, Aug. 20, the message "again made no mention of the possible return of unleaded gasoline," Rud's letter says. "Later that morning, the (message) was updated, now stating that there were … over 70 loads of unleaded gas available."

Magellan knew the fuel would be arriving in Grand Forks well before the company updated its information, Rud's letter said. It calls the incident "purposeful deception … that cost the citizens of the state of North Dakota a great deal of money," and said the PSC should encourage Magellan to "operate in a more ethical manner."

North Dakota fuel dealers were scrambling that weekend to procure supplies with some going as far as Minneapolis to buy gasoline, Rud said in an interview.

Bruce Heine, a spokesman for Magellan, said the pipeline does not own the gasoline it transports. It delivers fuel according to the wishes of the fuel's owners, Heine said in an e-mailed response to the letter.

Magellan's notification system "does not attempt to predict or speculate about potential future shipments of product whose owner may choose to have delivered to a particular destination, because of the variables involved in the transportation of multiple, separate products in a single pipeline over hundreds of miles," Heine's e-mail said.

North Dakota's three public service commissioners, who discussed the dispute Wednesday, said they would try to arrange a meeting between representatives for Magellan and affected fuel dealers.

The commission's president, Susan Wefald, said the agency may not have jurisdiction in the matter, but the commissioners said they may be able to broker a resolution to the complaints.

"As long as it gets fixed, I don't really care if we have jurisdiction or not," Commissioner Tony Clark said.

Loren Dusterhoft, who owns two Grand Forks service stations, said the lack of information at the time caused him to buy three loads of fuel from Alexandria, Minn. A load equals about 8,700 gallons.

Late that day, he found more than 70 loads were available in Grand Forks, he said. Going to Alexandria for the fuel cost him $4,745 in higher gas prices and freight charges, Dusterhoft said.

"We'd like to know when it's coming, and how much is coming, so we can kind of judge it," Dusterhoft said. "Maybe we can hang off for a few hours … so we can save a penny or two (a gallon), or 12 cents."

The fuel "comes from way down south," Dusterhoft said. "They've got to know how much fuel is coming up the pipeline. They don't just drop it there at 1 o'clock in the afternoon, and it gets here at 2."

Rud said fuel dealers were only looking for timely information about supplies. The August lapse cost them thousands of dollars in higher fuel and freight costs, he said.

"Given the crisis that we're facing in North Dakota, and the big push for us to keep product prices down … we can't be running 600 miles in one direction when there's no need to, when guys can drive over to the terminal in Grand Forks, five, six miles, and pick up product," Rud said.

Print Email

/news/state-and-regional
 
Sponsored by:

Connect with Us