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The BBC's Mark Gregory
"Garage owners claimed the oil company only kept its side of the bargain for 6 months"
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Tuesday, 20 February, 2001, 18:21 GMT
Exxon loses $500m damages case
An Exxon petrol station in Canada
Exxon might also face claims in the UK over the Tiger Tokens scheme
Exxon Mobil, the world's largest oil company, has been ordered to pay $500m (347m) in compensation to US petrol station owners who claimed they were charged inflated prices for their fuel.

The award was made by a district court in Miami after a lengthy trial in which it was alleged Exxon had cheated about 10,000 petrol station owners in 36 states out of promised discounts between 1982 and 1994.

Gene Stearns, representing the station owners, said the judge may later decide to add interest to the award, which would raise it to about $1bn.

Lawyers for Exxon said the company would appeal, adding: "We continue to believe that we... gave dealers a very fair price."

Discounts in question

The case revolved around a discount scheme under which retail customers buying petrol at Exxon stations with cash were charged four cents a gallon less than those paying with credit cards.

In return, the service station owners were supposed to receive a 1.7 cents a gallon discount on their wholesale petrol purchases from Exxon.

They claimed in court that they suspected they had not been receiving the discount for years but had not been able to tell from Exxon's invoices.

UK claim?

The ruling comes as Esso, the trading name for Exxon in the UK, faces a multi-million pound compensation claim from about 100 of its dealers over the Tiger Tokens promotion.

In January the Court of Appeal reversed a lower court ruling that franchise-holders, rather than Esso, had to pay for the prizes in the promotion.

Franchisees disputed a clause in their contract which obliged them to "join in" Esso promotions. The Court of Appeal supported the dealers argument that "join in" does not mean "join in and pay for".

The 10-year long Tiger Tokens scheme, which ended in 1996, gave customers a token for each six pounds worth of petrol they bought. The tokens could then be exchanged for prizes including white goods.

The Esso franchisees, backed by the Small Business Federation, will take the case to the London Commercial Court in the next few months.

Esso says the Court of Appeal ruling was "merely a procedural appeal".

Exxon Mobil recently posted annual profits of $17bn - a figure thought to be the highest ever recorded by a listed company.

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See also:

24 Jan 01 | Business
Exxon Mobil reaps record profits
13 Feb 01 | Business
Oil firms: Excessive profits?
24 Oct 00 | Business
Profits surge at oil companies
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