June 24, 2011

Dear NJGCA Member:

Here's what you'll find in this edition of the NJGCA Road Warrior, and thank you for reading:

EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS!
•Strategic Petroleum Reserve Release and an Update on Inspections

NEWS AROUND THE STATE
•General Assembly passes historic reforms on public employee benefits
•Federal Government to release oil from Strategic Petroleum Reserve
•Alternative Energy: US and EU working on rules, standards for electric cars
•Governor’s administration, key staffers considered most disciplined in recent history

TRAINING CLASS SCHEDULE
•NEW CLASS SCHEDULE!  See two class options below!

MEET THE FOLKS AT LIBERTY GAS
•Looking for a new brand for your station? Take a look at the opportunity below!

MEMBER BENEFIT PARTNER MESSAGE
•TMP Energy Solutions: Another Way to Save On Your Energy Bills! 

REAL ESTATE FOR SALE OR LEASE
•Interested in acquiring or leasing a property?  See below!

A SPECIAL MESSAGE FROM BELLOMO FUELS
•Serving New Jersey since 1910 -- Over 100 years of supplying gasoline retailers like YOU!

POLITICAL PARTICIPATON: THE NJGCA PAC
•Participate in the NJGCA PAC today and help us keep our Agenda rolling in Trenton!

THE MEMBER TOOL BOX
•On the NJGCA Homepage
•Know your Territory Manager!

 EXECUTIVE DIRECTOR'S MESSAGE: GREETINGS & SAL-UTATIONS! 

STRATEGIC PETROLEUM PRESERVE RELEASE, INSPECTION UPDATE

Yesterday I headed into work feeling good and prepared to tackle a number of items that needed my attention.  Unfortunately, halfway through my day I suddenly became overly enraged after I received a news update informing me that President Obama was going to release 30 million barrels of oil from the Strategic Petroleum Reserve (SPR)…which annoyed me to no end!

Funny how just reading that one story ruined my day, but it did.  You maybe reading this wondering ‘So what?’ and you’d be thinking along the exact same lines as the so-called experts who are advising the powers that be.  And while everyone else believes this will be good for consumers, the fact is that any relief will be short lived – and what comes after could be worse than what consumers (and retailers) face currently. 

Why do I feel this way?   Because, even at the most basic level, government has no business messing in the market. When it does, it usually does so for political reasons that achieve short-term goals.  All too often, they ignore the long-term foresight and possible repercussions that could result from their actions.  Consider what possible repercussions could stem from the President’s actions this week.  The Administration made its decision not because the refineries needed extra crude or because of an emergency, but solely because gasoline prices are still high and as a reaction to OPEC’s decision to not increase oil production. 

This was a ‘feel good’ measure only; something done to make the public believe that Washington was doing ‘something’ for the people.  As you can tell, Washington is equally as bad at doing this as Trenton is. Yet, did anyone think far enough ahead to wonder if OPEC would cut its own production to make up for the 30 million barrels of oil we release?  Did anyone ask what kind of precedence this will create and if we will be forced to release even more oil at some point to counter balance a second production cut?

But that is all small potatoes compared to what it means for the nation defensively.  The SPR was to be used for EMERGENCIES only – no to play in the market or upset free trade.  In starting this dangerous precedent, it is likely that other leaders (when gasoline prices are just as high and consumers are calling for blood) will be tempted to use it again.  If that cycle continues, how much longer before a STRATEGIC asset becomes just another resource to exploit? 

Putting this in an even more somber perspective, the entire 30 million barrels we are set to release from SPR amounts to only ONE DAY’S CONSUMPTION of oil!  That’s hardly worth creating such a bad precedent for considering that no emergency exists and this is being done only to manipulate the marketplace.  I am on record – as recently as in April - saying this is a dumb move and a dangerous move.  You can read one such opinion piece that was published in a few papers at the time by clicking HERE

Unlike some of our decision makers, I remember quite well what it was like to have an oil embargo.  I experienced this twice: once as a high school junior and again as an Exxon station owner.  I was running my own location for barely a year when it hit.  And boy did it ever.  However, unlike today’s environment, I actually made some decent money at the time.  In fact, I was able to increase my margin ten-fold once I was put on allocation.  I did this even though the federal government restricted us to 15¢ a gallon profit thanks to a loophole called ‘banking’.  This was a way of working around that regulation and I informed other retailers around the state to do the same.  You started by calculating the difference between what federal regulations would have permitted me to charge over the years that I didn’t charge the 15¢ a gallon profit, then placing that amount of margin in a theoretical ‘bank’.  This allowed me to do well during the embargo and keep my place running.  However, today, if we get into a tit-for-tat feud with OPEC for any reason, and supplies diminished enough to recreate the allocation scheme again, there is no federal regulation limiting what you can charge, so a theoretical bank gets thrown out the window.  That is important since NJ has a state of emergency law that has since been implemented which will not permit you to charge more than 10% above your present margin at the time a state of emergency is declared.  That means while I made very good money in 1979 because of an oil shortage, you will be screwed and have no way of keeping your place running. 

So to say I’m mad would be an understatement.  Anyone just glancing at their local station the last few months could have informed Washington that, thanks to market forces, gasoline prices were slowly declining on their own!  It wasn’t because of government action, but because consumers had enough of paying high prices and the market reacted!

I have to say, no matter how long I’ve been around this business, I always seem to underestimate the idiocy of elected officials and their desire to ‘do good’ by voters.  This week I was once again reminded of how much credit I (unjustly) give them.
 
Recently you received a VID notice from Motor Vehicles that has sparked a flood of messages and phone calls into NJGCA headquarters.  The message states that New Jersey has solicited a new Request For Proposal (RFP) to ‘hire a consultant to conduct research to write a replacement RFP for the current Emission Program and to oversee the transition from the existing program to the new program.’  Many of you have contacted us and asked what does this mean?  Will you be required to buy new equipment?  How much will this cost you?  And countless other questions too. 

First let me say STOP and don’t get worked up since this VID message doesn’t mean any of that.  You will recall that the five year contract that was signed by Parsons in 2008 will end in 2013.  The state is putting out a notice for bidders now in anticipation of that contract expiring in 2013.  Since it’s a very lengthy procedure, the process starts today as MVC seeks to figure out how to continue the inspection program. 

Remember that last year, I testified before the Governor’s Privatization Task Force to advocate for New Jersey to move to a privatized inspection program.  In their final report, the Task Force literally used the proposal I handed them and outlined in my testimony.  In it, I called for the CIFs to be permanently closed and for PIFs to take over all inspection responsibilities. 

I was told privately several months ago that this RFP was going to be issued, however, I was not allowed to speak about it publically.  I am expecting that any future program that is recommended by professional consultants will include the best means possible to transition to an all PIF inspection system.  While I cannot guarantee what the outcome will be, I strongly believe that this is where the state (and the consultants) will eventually go.  Yes, the state has screwed us in the past before, but NJGCA has many allies high up in the Administration that agree with our plan to privatize the state inspection program. 

Nevertheless, what I can guarantee is that NJGCA will be a loud voice to influence the final decision.  We are still two years away from seeing this process play out, but we’re stating to work on this today so we can declare victory tomorrow.  

Thanks for listening - See you next week!

Regards,
Sal Risalvato
Executive Director

NEWS AROUND THE STATE

6/23/2011:
General Assembly passes historic reforms on public employee benefits
Late Thursday night, members of the General Assembly voted for sweeping changes to the current public employee pension and health benefits system.  The proposal had bipartisan support and passed by a final vote of 46-32.  Among the most controversial changes would be an end to the current collective bargaining arrangement in determining medical benefits.  Instead, a panel made up of union workers and state managers would determine healthcare benefits for the state’s 500,000 public workers. Higher pension and health benefit contributions, the elimination of cost of living increases for retiree pensions and hiking the retirement age for new workers were also included in the final proposal.  Click above to read more on these historic reforms.

6/23/2011:
Federal Government to release oil from Strategic Petroleum Reserve 
After the Organization of Petroleum Exporting Countries (OPEC) failed to raise oil production two weeks ago, the United States and members of the International Energy Agency (IEA) will release 60 million barrels of crude oil from emergency reserves.  Half of this amount will come from the nation’s Strategic Petroleum Preserve with the other half coming from other IEA member states. The move signals renewed frustrations oil consuming nations have with OPEC’s leadership for failing to raise production despite the ongoing turmoil in Libya.  Click above to read the full article.

6/21/2011:
Alternative Energy: US and EU working on rules, standards for electric cars
As automakers push to make electric cars available to consumers in world markets, the United States and the European Union have agreed to begin working on joint standards and regulations to help break down barriers in getting these new technologies to market more easily.  Read the full story above.

6/19/2011:
Governor’s administration, key staffers considered most disciplined in recent history
As Trenton moves to implement sweeping changes to the state’s public employee pension and benefits system, an article looks behind the scenes at the internal workings of the Governor’s inner circle.  Observers from both sides of the political spectrum have hail key administration officials for their discipline and know-how in getting important elements of the Governor’s agenda implemented.  To read the full article, click link above. 

CLICK HERE TO READ MORE ARTICLES IN OUR “NEWS AROUND THE STATE” ARCHIVE

MEMBER BENEFIT PARTNER MESSAGE

TMP Energy Solutions
Another Way to Save on Your Energy Bills

We have had a number of NJGCA members successfully reduce their rate per kWh   signing up through our energy saving program. We know it’s difficult to collect 12 months worth of previous electric bills to get an “accurate” analysis when comparing a variable rate to a fixed rate, but we now have another option available. 

This new solution is a power purchase option; the other program is still in full force and has saved members thousands of dollars. If you sign up for the power purchase option, you will be grouped with other NJGCA members until the minimum KW demand is acquired. By pooling the member’s usage together, you will be able to take advantage, as large energy users do, and receive a lower kWh rate.

Each member will receive their own contract. Each member is responsible to sign and return the agreement the day it is received in order to secure the price for their group.

Please do your due diligence, so when you receive the proposal and the agreement you will be able to make an intelligent decision.

If by chance, you still want us to assess you bills, to give you a price to compare, we will require12 months of your most recent utility bills.

There are no bills required, but we would still like to have one bill per meter on file to check account #’s, meter #’s  service addresses and other pertinent information incase there is a problem.

The term of the agreement is for 12 months. During this term period, you will have price protection against any energy price increases along with a low fixed kWh rate.

If you are interested in becoming part of this power purchase option, please contact Phil Apruzzi at the NJGCA.

Remember when you sign up your energy through the NJGCA Energy Program, TMP makes a considerable donation to the NJGCA Scholarship Fund through their proceeds. This has no affect on your rate, and costs you nothing out of pocket.

We hope to help hundreds of NJGCA members reduce their utility costs by participating in this and our other cost reduction programs.  Our purpose, in the endeavor, is to help NJGCA members lower their energy costs while supporting the NJGCA Scholarship Fund. 

Contact Phil Apruzzi at 973-376-0066 or email Phil at phil@njgca.org. Mention that you are interested in saving money on your energy bills. NJGCA & TMP Energy Solutions will handle all the rest.