Gas Station Owners Bear Brunt of BP Consumer Boycott
Sunita Sohrabji | 7/11/2010, 10:44 a.m.
Indian American BP gas station owners across the country are reporting significant losses of up to 20 percent in sales as angry consumers boycott their stations to protest the massive oil spill in the Gulf of Mexico.
"People are coming in to buy groceries, but they're telling me, 'we don't want to buy BP gas,'" said Sunny Handa, who owns three BP stations in West Palm Beach, Fla., with his business partner Suresh Kapai.
"My regular customers are telling me, 'we just want to hurt BP,'" Handa told India-West, estimating he has lost more than $70,000 in sales in the past two months due to the boycott.
Nearly all the 10,000 BP stations around the U.S. are owned by independent dealers who are under long-term contracts to sell BP fuel, reports the Wall Street Journal. Handa said his contract expires in seven years and early termination would cost him thousands of dollars.
The actual gasoline sold at any station is a mixture of fuel from multiple refiners or importers, so the direct impact of any slowdown at BP-branded stations is minimal for the company, which can also sell excess supplies as private-label fuels to other retailers.
In an effort to mitigate lost sales, Handa and Kapai are offering free hot dogs to customers who purchase $20 or more of gas.
"This is hurting us big time," said Handa. "Thousands of people are just passing us by."
The Deepwater Horizon drilling rig exploded April 20 near the Louisiana coast, killing 11 workers and setting off damage to the Macondo oil well in the Gulf of Mexico. The U.S. government estimates that 60,000 barrels of oil -- 2.5 million gallons - are spilling out of the damaged well each day, creating the largest-ever environmental disaster in U.S. history.
Environmental organizations such as Greenpeace and the Sierra Club have stopped short of calling for a boycott of BP. But several protests around the country have called for a boycott of the U.K.-based oil company.
A Facebook campaign, Boycott BP, has gathered more than 735,000 supporters.
But Amit Patel, who owns three BP stations in Illinois and Indiana, believes angry consumers are addressing the wrong target.
"People fail to understand that when they're boycotting BP, they're boycotting the small gas station owner," Patel told India-West. "BP has deep pockets. The company is not going to be hurt by a boycott," he added.
Patel estimates the boycott has led to a loss in sales of 15,000 to 20,000 gallons per month at each of his three stations, a drop of about $45,000 in revenue per station. BP has not dropped its gas prices since the spill began, but the company has let station owners know that it plans to launch an aggressive marketing campaign aimed at improving its image and restoring sales volumes, said Patel.
Patel, who currently employs 34 people, said he may have to lay off workers if the consumer boycott continues.
South African natives Kash and Meeta Rama own a BP station in Danville, Virginia, but say their business has not been impacted significantly by the boycott. The Ramas also serve the only Indian food in town -- including a very popular spicy baked chicken -- from the small Rose Market adjoining the gas station.
"That's what brings the people in," Kash Rama told India-West. "They come in for the chicken, they buy some gas," he added.
"Our customers have told us, 'don't worry, we'll support you,'" said Rama, who bought the station last July. "Only one customer has said 'I'm never going to buy BP gas,'" he said.