Petroleum Marketing Practices Act (PMPA)

Practice Areas:

• Business Law
• Contracts
• Limited Liability Companies
• Petroleum Marketing Practices Act
• Real Estate
• Tax Increment Financing

Gas Station Law and PMPA

The Petroleum Marketing Practices Act (PMPA) is a federal law regarding the relationship between gasoline refiners or distributors and their retailers. Among other provisions, it sets certain requirements for the termination or nonrenewal of retail sale agreements and/or leases, prohibiting franchisors from terminating a franchise, or failing to renew one, except in accordance with its provisions. It is intended to protect distributors and retailers. A supplier may terminate a franchise only for certain specific reasons, including the franchisee's failure to make a good faith effort to carry out the terms of the franchise or if the supplier loses the right to grant use of the trademark under which the gasoline is sold. A supplier may choose not to renew a franchise for all of the reasons it may terminate a franchise and for certain other additional reasons. The PMPA preempts state laws concerning gasoline franchise termination and non-renewal. Distributors need to consider the provisions of the PMPA in all of their dealings with gasoline retailers.