Lawsuit Alleges Propane Companies Conspired to Fix Prices

Propane_Companies_Conspired_to_Fix_PricesTwo leading propane companies, Ferrellgas LP and AmeriGas Partners LP, have been hit with a proposed class action, accusing them of conspiring to fix the price of propane sold in exchangeable steel tanks.

The plaintiff, Jason Moore’s Texaco LLC, said AmeriGas and Ferrellgas, the parent company of Blue Rhino, conspired in 2008 to raise the price of propane sold in exchangeable tanks by 13 percent, Law360 reports. The companies provided 13 percent less propane per tank – reducing the amount that constituted a full tank – while still charging the same price per tank, according to the suit filed Monday in Missouri federal court. Conspiracy to fix prices is a violation of Section 1 of the Sherman Act. Direct purchasers who may be eligible for inclusion in a class action include small business such as gas stations, convenience stores, hardware stores and groceries that sell filled propane exchange tanks. They must have purchased the pre-filled tanks directly from Ferrellgas, AmeriGas, or AmeriGas’s parent company, UGI Corporation, in or after July 2008. The tanks involved carry the brand names Blue Rhino and AmeriGas.

The Federal Trade Commission (FTC) filed an administrative complaint in March alleging the two exchange tank companies – which at the time controlled 80 percent of the market for wholesale exchange tanks – decided in 2008 to reduce the amount of propane in their exchange tanks sold to Wal-Mart from 17 pounds to 15 pounds while keeping the cost level, amounting to a de facto price increase. When Wal-Mart at first refused to accept the reduction, the two companies secretly agreed that neither would move from its reduction decision to appease the company, Law360 reports.

Moore’s Texaco seeks to represent all people or entities across the U.S. that purchased propane directly in exchange tanks for resale from one or more of the defendants after July 21, 2008, according to Law360.

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