BP (BP), responsible for the worst oil spill in U.S. history, is offering gas station owners who do business under its name between $50 million and $70 million in financial help.
According to the Associated Press, the owners, operators and suppliers of the 10,000 or so BP gas stations, the vast majority of which are not owned by the British oil company, will get "cash in their pockets, reductions in credit card fees and help with more national advertising." Outlets in the Gulf region will get bigger cash awards, which will be based on distributors' volume, the AP said.
The decision by BP is not surprising. DailyFinance reported last week that station owners were seeking help from the beleaguered oil giant after some said that business was off by as much as 40% since the deadly April 20 explosion on the Deepwater Horizon oil rig.
No Longer Much of a Retailer
In 2007, BP announced it was exiting the retail gasoline business because the margins were weak. Rivals ExxonMobil (XOM) and ConocoPhillips (COP) did the same thing. BP still owns about 200 stations. The trade publication Oil Express estimates that BP is the second-largest gasoline marketer in the U.S and last year sold about 22 billion gallons.
Since all BP stations, regardless of owner, share the BP name, they have become magnets for protesters enraged by the disaster in the Gulf. Activists like Public Citizen are calling for a boycott of BP stations to inflict the biggest possible damage to BP's brand. Station owners are stuck with BP because many have iron-clad agreements that make it almost impossible to sell other brands of gasoline.
The BP Amoco Marketers Association, which is currently notifying members about the deal, could not immediately be reached for comment. A spokesman for BP had no immediate comment.
BP Gives Gas Station Owners a Lifeline