FOR RELEASE: OCTOBER 26, 1993
FTC CHARGES TEXAS GAS RETAILER WITH OVERSTATING OCTANE RATINGS;
FUEL DISTRIBUTOR TO PAY $90,000 CIVIL PENALTY
TO SETTLE RELATED CHARGES
Rocket Gas and Car Wash, Inc., a gasoline retail chain
operating in the areas of Houston and Galveston, Texas, and its
principal officer, Mansoorali Virani, have been charged by the
Federal Trade Commission with overstating the octane rating of
gasoline they sold to consumers, in violation of the FTC's Octane
Rule. A second firm, Moffitt Oil, Company, Inc., a fuel
distributor based in Cypress, Texas, and three of its officials,
have agreed to pay a $90,000 civil penalty to settle related FTC
charges. The FTC alleged that, among other things, Moffitt
knowingly assisted Rocket Gas in the alleged deception by pumping
gasoline into underground storage tanks connected to gas pumps
that Rocket allegedly mislabeled.
The FTC's complaint detailing the charges against the
Moffitt defendants alleges that they knowingly dumped low-octane
gasoline, purchased by Rocket, into tanks with higher octane-
rating stickers. The FTC complaint against Rocket alleges that
it then sold the low-octane gas to consumers and intentionally
misrepresented it to be gasoline of a higher octane-rating. The
complaints also allege that the Moffitt and Rocket defendants
failed to properly certify or post octane ratings and failed to
maintain the proper delivery or certification records required by
the FTC's Octane Rule.
- more -
(Rocket/Moffitt--10/26/93)
The FTC's complaint against Moffitt Oil also names its three
top officials: Jo Ann Moffitt, president and secretary; Roy
Moffitt, the vice-president and general manager and Donald
Moffitt Jr., another vice-president.
An octane rating is a measure of a gasoline's ability to
resist automotive engine "knock" or "ping" resulting from an
uneven burning of the compressed fuel-air mixture. The Octane
Rule requires retailers to disclose the octane rating of their
gasoline by posting the now-familiar bright yellow sticker on
each pump. (Effective Oct. 25, the Octane Rule will be renamed
"the Fuel Rating Rule" to include alternative liquid automotive
fuels including, among others, methanol and ethanol.) Under the
rule, gasoline refiners and importers determine the octane
rating. After that point, each entity in the distribution chain
must certify the octane rating to the next recipient, based
either on its own determination or the certification it received.
The disclosure requirements of the Octane Rule are intended to
help consumers choose the gasolines which are properly suited to
their vehicles.
The General Accounting Office has reported that octane
misrepresentations or cheating is a problem in some states,
particularly in states without routine octane testing programs.
In a 1990 report, the GAO found that octane misrepresentation
tends to occur more frequently in premium-grade gasolines. Price
differences between regular unleaded and premium unleaded
gasoline mean that even a small percentage of octane
misrepresentation results in consumers paying a significant
amount for octane they do not receive, according to the report.
Under the proposed consent decree to settle the charges
against the Moffitt defendants, Moffitt and its officers would
pay a $90,000 civil penalty and would be prohibited from future
violations of the Octane Rule and from assisting others in making
the type of misrepresentations alleged in the complaint.
In its complaint against the Rocket defendants, the FTC asks
the court to prohibit them from further violating the Octane
Rule, and to order them to pay civil penalties and provide for
redress to consumers who have been injured by the alleged
conduct.
The complaint against the Rocket defendants and the
complaint and proposed consent decree with Moffitt were filed
today in U.S. District Court for the Southern District of Texas,
in Houston, by the Department of Justice on behalf of the FTC.
(Rocket/Moffitt--10/26/93)
The Commission vote to authorize the filing of the
complaints and settlement was 5-0. The FTC's Dallas Regional
Office handled the investigation of this matter.
NOTE: The Commission files a complaint when it has "reason to
believe" that the law has been or is being violated, and it
appears to the Commission that a proceeding is in the public
interest. The Rocket complaint is not a finding or ruling that
the defendant has actually violated the law. That case will be
decided by the court. A consent decree, on the other hand, is
for settlement purposes only and does not constitute an admission
by the company that it violated the law. Consent decrees have
the force of law when signed by the judge.
Copies of the complaints and proposed consent decree will be
available shortly from the FTC's Public Reference Branch, 6th
Street and Pennsylvania Avenue, N.W., Washington, D.C. 20580;
202-326-2222; TTY for hearing impaired 1-866-653-4261. The FTC
also has a consumer brochure titled "Octane Ratings" which
explains the Octane Rule and how consumers can choose the best
gasoline for their automobiles. It is available free from the
above address.
# # #
MEDIA CONTACT: John Leslie III, Office of Public Affairs
202-326-2178
STAFF CONTACT: Tom Carter or James R. Golder
Dallas Regional Office
100 N. Central Expressway, Suite 500
Dallas, Texas 75201
214-767-5503
(FTC File. No. 922 3055)
(Civil Action Nos. Rocket: H-93-3390; Moffitt: H-93-3391)
(Rocket)