April 25, 2018
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Airport fuel pact decision on hold

By Nok-Noi Ricker, BDN Staff

BANGOR, Maine — Saying they needed more information, city councilors made no decision Monday night regarding Exxon Mobil Corp.’s request to transfer the rights associated with its fuel handling and storage contract at Bangor International Airport to a Minnesota company.

Councilors also gave tentative approval to a request from BIA Director Rebecca Hupp and City Manager Edward Barrett to bring on board a consultant with some expertise in airport fuel pricing and related issues.

“Two of the key issues are can they guarantee supply and can they price competitively so that we can continue to do well,” Barrett said during a workshop on the matter at City Hall.

If Exxon Mobil cannot guarantee an adequate supply of fuel, Barrett said, “that would give us grounds for default proceedings.”

Hupp said more detailed information likely will become available next week, when representatives from Exxon Mobil and its possible successor are scheduled to be in Bangor for meetings with city and airport officials.

Given that, Bangor officials are seeking an extension of Exxon Mobil’s Sept. 30 deadline for deciding the issue. There was no word Monday night on whether the city’s request will be granted.

Exxon Mobil has been BIA’s fuel supplier since 1976. The company now wants to turn over its rights and responsibilities to its main distributor, Western Petroleum Co. of Minnesota, according to a request reviewed last week by members of the council’s transportation and infrastructure committee.

According to a letter from Exxon Mobil to Hupp, the fuel company has had a 10-year business relationship with Western Petroleum.

Earlier this summer, Exxon Mobil notified city leaders that it did not plan to renew its contract for fuel handling and storage at the airport. The company said that a change in state tax law that redefined how Maine taxes corporate revenue forced its hand by creating a disproportionately high tax rate.

The corporate tax change, however, won’t have the same effect on Western, which does not own oil wells, refineries and other taxable infrastructure, Barrett said.

The corporate tax change was authorized by the Legislature as a way to raise an additional $6 million in corporate taxes, according to Barrett.

“What they did is they benefited Maine-based companies by changing this formula anticipating [that] a relatively small number of large companies without a major presence in the state” would bear the brunt, he said.

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