Issue link: https://read.dmtmag.com/i/202668
LEGAL CORNER Marketing Blended and Unblended Fuel As this industry knows, it is seeing an increase in demand for unblended or conventional gasoline. Clearly this is not limited to the concerns over using ethanol in boat motors, lawn mowers, etc. Some folks just like knowing that the gasoline they're putting in their cars doesn't have any alcohol in it and are willing to pay the added cost. However, in trying to meet these demands there are a myriad of, typically logistical, issues in marketing these products. H. Dean Mooty, Jr. Mooty & Associates, P.C. 20 Oil Prophets Most marketers are not wanting to bite off the cost of new dispensers for conventional fuel and thus are simply adding conventional fuel as an option within their existing MPDs. Oftentimes and in fact most times, this set-up requires the selling or the dispensing of both a blended product and an unblended product through a single hose. Contrary to much misinformation around the state, you CAN sell blended and unblended fuel through a single hose. The problems that arise with doing so are largely labeling issues. The Alabama Department of Agriculture and Industries (the "Department") will not allow you to label a product on the dispenser as containing "No Ethanol" if the conventional gas is being dispensed through the same hose as a blended product. As an industry, we have fought that and argued that the amount of alcohol left in the hose after someone purchases E10 through that hose and then the next customer purchases the conventional gas through the same hose, is literally diminimus and absolutely meaningless to the purchaser of the conventional gas. We have met and discussed this issue face to face with the Commissioner and even taken scientific data to show specifically how little alcohol would be in that conventional purchase. The Department's position is – as best I can describe it – simply one of regardless of how much, there IS alcohol in that conventional purchase through the single hose and thus you cannot label that hose or dispenser, or more accurately that unblended product, as containing no ethanol. It has been frustrating, to say the least, chasing our tail over this issue. What it does as a practical matter is make it difficult to market the conventional product without incurring the major expense of installing new equipment. Most of my clients who sell conventional gas take some comfort in believing that their regular customers know that they have it and that it's available, even though it's difficult to advertise with the Department's restrictions. A related issue is pricing the product on your street sign when you are selling both a blended and unblended product of the same grade. For example, if you're selling both a regular 87 E10 and a regular 87 unblended product, you cannot simply put on the price sign the price of the regular unleaded E10 and say nothing else. The Department will require you to do one of a couple of things. They will either require you to put the price of the higher unblended product on the price sign, which of course no one wants to do, or you have to put "Contains Ethanol" or other descriptive words to show that the price posted is in fact for the