Thursday, January 24, 2008

Petroleum Marketing Practices Act Amended to Allow Franchisees to Sell “Renewable Fuel”

This posting was written by Peter Reap, Editor of CCH Business Franchise Guide.

Recent amendments to the Petroleum Marketing Practices Act prohibit gasoline franchisors from restricting franchisees—through a new or renewed franchise-related document—from (1) installing renewable fuel pumps or tanks (except when premises are owned by the franchisor), (2) converting fuel pumps or tanks to renewable fuel use, (3) advertising the sale of any renewable fuel, (4) selling renewable fuel in any area of the franchise premises, (5) purchasing renewable fuel from another source if the franchisor does not offer such fuel for sale, (6) displaying the availability and price of renewable fuel, or (7) permitting payment of renewable fuel with a credit card.

“Renewable fuel” is defined as any fuel that is at least 85 percent ethanol or that is a mixture of biodiesel and diesel containing at least 20 percent biodiesel. Under the amendments, no franchise-related contract that requires the sale of three grades of gasoline may prevent a franchisee from selling a renewable fuel in lieu of another grade of gasoline.

The amendments were contained in H.R. 6, which was signed by the President on December 19, 2007 and became effective on December 20, 2007. The Petroleum Marketing Practices Act, as amended, is reported at CCH Business Franchise Guide ¶6940.

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