Lukoil Boycott In NJ Would Endanger 1,200 Jobs, Group Says

NEWARK, NJ — Are you a New Jersey driver planning on boycotting Lukoil gas stations to protest the Russian invasion of Ukraine? There’s something you should consider first, according to an industry group: it could be putting a local Garden State resident out of work.

The New Jersey Gasoline, C-Store, Automotive Association (NJGCA) – a nonprofit trade association representing motor fuel retailers and associated small businesses – is among the voices urging caution when it comes to a recent wave of Lukoil boycotts in the U.S.

With about 120 Lukoil gas stations in New Jersey, their closure would mean that anywhere between 600 and 1,200 workers will end up on the state’s unemployment rolls, the group said Friday.

Russian President Vladimir Putin has seen global condemnation after launching a full-scale invasion of Ukraine. The conflict has already cost at least 136 civilian lives, with the true figure feared to be much higher, the United Nations reported last week.

The fear and uncertainty has hit close to home for many people in New Jersey. Some Garden State residents have struggled to escape Ukraine after the invasion, including a pro athlete and a well-known dancer and business owner. Other New Jerseyans have family members living in Ukraine, and say their households are "in turmoil" with worry.

Some New Jersey elected officials have been in favor of launching sanctions against Putin and Russia. Last week, Gov. Phil Murphy signed an executive order that directs state agencies to identify ways to keep Garden State money away from the Russian government.

The same day, the city council of the state's largest city, Newark, voted to temporarily suspend the business licenses of Lukoil in solidarity with Ukraine.

Lukoil North America is a subsidiary of Russia-based PJSC Lukoil Company, with "deep ties" to the Russian Federation and oligarchs aligned with Putin, the council’s resolution alleges.

• Read More: Newark Suspends Lukoil Gas Station Licenses

Many people have expressed support for such U.S.-based sanctions against Russia and Putin, including Sen. Cory Booker, a Newark resident, and Rep. Tom Malinowski (District 7).

Speaking at a roundtable sponsored by Invest in America Now, the federal lawmakers said that employees of the Lukoil gas stations in Newark and in more than 100 other locations across the state will likely be able to find new jobs amid a high demand for labor, the New Jersey Globe reported.

‘SLAPPING A BRAND NAME ON IT’

However, other people say that boycotting Lukoil won’t actually put pressure on Putin and Russia – only hurt business owners and workers who have nothing to do with the war.

“First off, I want to be absolutely clear that I strongly support dramatic sanctions against Russia in retaliation for its unjust war of aggression against Ukraine, and I am glad to see that the governor and Legislature are working to make sure New Jersey is the leading state in U.S. to cut off any possible financial support for the Russian government,” NJGCA executive director Sal Risalvato said.

But there’s a big puzzle piece that needs to be considered before you take up the boycott call, Risalvato added. Most if not all of the Lukoil stations found in this state are not being managed or operated by the Russian Lukoil corporation, but by individual franchisees who have signed multi-year contracts.

“I have seen reports of other businesses like liquor stores choosing to stop stocking Russian manufactured liquors, and I applaud them for their initiative,” Risalvato said. “But these Lukoil franchisees do not have that option. Many of these franchisees never even chose to be associated with Lukoil – they were Getty or Mobil locations purchased in bulk by Lukoil years ago.”

Even the actual gas that they buy wholesale comes from U.S. suppliers, Risalvato said: Lukoil just “slaps their brand name on it.”

“Small businesses, and particularly gas stations, have long been a difficult but rewarding pathway to achieving the American Dream for immigrants from across the world,” Risalvato continued. “They have also been a business passed across multiple generations of American citizens. These are the people who would be victimized if the government were to decide to shut these businesses down.”

Their employees would also be out of work, Risalvato said.

“With about 120 stations in the state, I would estimate their closure would lead to between 600 and 1,200 people instantly added to the unemployment rolls,” Risalvato said.

An industry expert recently told CNN that retail gasoline sales are a “tiny portion” of the revenue of oil companies compared to their production of crude and trading cargos and barges. Any successful boycott of Lukoil-branded gas stations “would likely have a negligible effect on the parent company or its billionaire president,” but could prove financially devastating for dozens of U.S. franchise owners and their hundreds of local employees, Snopes.com reported.

• See related article: NJ Antiwar Activists Say US Isn't Blameless For Ukraine-Russia

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