ELIZABETH, NJ – Lukoil, a Russian-based, multinational gas and energy corporation, headquartered in Moscow, but operating thousands of independently owned gas stations across America is now in the crosshairs of New Jersey Governor Phil Murphy.
Instead, Murphy’s former employer Goldman Sachs should be under fire from the governor as that company has a significantly large share of investments in Russia than local American Lukoil franchise owners could even imagine.
As Russian President Vladimir Putin continues his war against the people and government of Ukraine, ordering his forces to level cities and targeting civilians, an anti-Russian movement is afoot in America.
When asked if he will go after Lukoil stations in New Jersey, Murphy said, “Ya.”
“We have 33 of them and we’re trying to figure out what to do with them,” Murphy said. “They happen to be franchised by local New Jersey interests in most cases, but that’s a good example of you know what, not in New Jersey. We’re going to have to figure that out.”
But is punishing local Lukoil American small business owners running Lukoil franchises in New Jersey going inflict pain on Vladimir Putin?
Most likely not. That’s because Lukoil isn’t selling Russian gas. Their stations in New Jersey sell American gas. In fact, they sell New Jersey-made gas, refined at the Elizabeth-based Bayway Refinery owned by Phillips 66 Petroleum. Phillips, formerly Conoco was one of the first American gas producers back in the late 1800s.
Lukoil is Russia’s second-largest oil company, but after the fall of the Soviet Union began making inroads into the U.S. market. Lukoil bought out American gas giant Getty in order to secure the branding at over 1,000 gas stations nationwide previously branded as Getty. The Getty brand was replaced with the iconic new Lukoil branding and on December 5th, 2011, the Getty Oil Company declared bankruptcy, ending an iconic American brand.
Conoco Phillips used to own 20% of the Lukoil company in the United States, but in 2011, sold its stake in the company. In 2013, Lukoil bought American gas giant Hess’ stake in the Russian market.
While a boycott of Lukoil in New Jersey could send a message to the Russian-based gas company, it’s likely to have little, if any impact on Russia or the company itself. Instead, New Jerseyans who invested into the American dream and purchased Lukoil franchises and their New Jersey employees are the ones who will bear the brunt of the economic impact of a boycott.
Once again, Phil Murphy is acting upon political facts and figures and not real facts. He has gone from being a political medical scientist to becoming a political economics policymaker.
Small business owners and their employees will be used as collateral damage because they own a Russian branded gas station franchise that buys New Jersey-made gas and employs New Jersey citizens to man the pumps.
Murphy’s Lukoil aggression is similar to outrage over Smirnoff vodka, where people are videoing themselves dumping bottles of the spirit down the drain. Except Smirnoff is owned by an English company and bottles in the United States are distilled at the company’s Illinois distillery.
International commerce, as Phil Murphy knows goes beyond calling for boycotts and understanding that sometimes, what seems like it is, often isn’t.
On the other hand, Phil Murphy, a former Goldman Sachs executive was part of a company that had $1.7 billion dollars in Russian investments in its GQC international equity fund.
“Coming into 2022 we saw attractive growth opportunities and valuations in many Russian companies”, Goldman Sachs said of its large investment into Russian companies. “Under these circumstances, the Russian securities in the portfolios for which we determine valuations are now being ‘fair valued’ in the absence of true market values.”
Will the former Goldman Sachs executive, Phil Murphy call on his former company to divest all of its Russian investments? As of today, Goldman Sachs says it is only cutting $222 million worth of Russian investments out of its $1.7 billion portfolio.
Once again, Murphy is practicing without a license and will cause more damage to his own citizens here in New Jersey while completely ignoring the broad investment impact of his former employer. Around here, we call that “Murphy’s Law”.
Boycotting Lukoil and having the government shut down Lukoil stations in New Jersey would be like going after liquor stores because they still have bottles of Russian Stoli on the shelves.