East Meadow, NY  04.17.08. Contaminated Fuel.

Due to circumstances beyond the Company’s control a limited number of Lukoil stations, two of which were on the Garden State Parkway, received contaminated fuel the evening of April 17^th.  The Company and the Terminal Operator, NuStar, quickly identified the problem and took corrective action.  However numerous customers and their vehicles were impacted.  The Company continues to provide for the emergency travel and maintenance needs for those affected.  Our commitment to customer satisfaction, consistent product quality and competitive pricing remain the foundation to our retailing efforts.  We apologize for any inconvenience.  Furthermore we are implementing preventive measures at all of exchange and proprietary terminals to insure product integrity.

Below is the “Official Statement” from NuStar explaining the circumstances of this unfortunate incident.

 Official statement released from San Antonio, NuStar Energy
 ________________________________________________________________

  “We sincerely regret that water-contaminated gasoline was sent to service stations in northern New Jersey from our terminal in Linden, NJ.    

While the exact cause of the incident is under investigation, it appears that it was operator error related to a recently completed tank conversion for summer grade gasoline.  Such conversions occur twice a year when we switch between summer and winter grades of gasoline.  In this instance, the residual inventory of winter gasoline in the tanks was diverted to a separate tank to ensure that it did not mix with the summer grade fuel.  It appears that the fuel from this separate tank was inadvertently routed to the loading rack, where it was loaded into tanker trucks that delivered to the Lukoil and other stations.

Upon learning of the problem at approximately 7 p.m. yesterday, we immediately contacted all stations that we knew had received a shipment of the fuel and instructed them to discontinue selling the fuel until it could be removed and replaced.   Simultaneously, we halted all loading from the tank that included the fuel in question and began loading from another tank that contained uncontaminated gasoline, so deliveries could quickly resume. 

 Working closely with Lukoil, we are doing everything possible to ensure that the fuel is removed from the stations and that repairs are made to affected vehicles.  Motorists who have been impacted can direct questions and claims to Lukoil’s helpline at (877) 858-9962.

 At this point, we have verified that 11 truckloads of this product were shipped to Wall Township, Whiting, Bloomfield Parkway North and South, Fairlawn, Fort Lee, Melton, Newark and Bellville stations.   

It is important to note that water is inherently present in large gasoline storage tanks at any fuels terminal. And, while there are systems in place to manage the water levels to ensure that water does not make its way from the tank to a delivery truck, gas station or automobile, yesterday's incident was unique because the tank that was inadvertently tapped contained residual inventory from a number of tanks as a result of the switch to summer grade fuel, thereby dramatically increasing the fuel's water content. 

Once again, we want to sincerely apologize for the inconvenience this error has caused to all impacted individuals.”