Sweitzer Oil to close down if sale is not reached by autumn

“I guess we’ll be looking for a new place to fill up”

The Gunnison Valley’s only local supplier of petroleum products is in financial trouble and looking to sell or close entirely within the next two months.

The move is now leaving several gas stations and government offices scrambling to find a source of fuel.
Paradigm LLC, the parent company of Sweitzer Oil, a Gunnison-based bulk and retail fuel distributor, announced on Tuesday, August 4 that they were looking to sell the fuel business. If no buyers can be found, the company has plans to shutter all operations by the end of September.
Sweitzer Oil was originally started by Gunnison’s Sweitzer brothers in the early 1960s. Today Sweitzer fuels are being pumped by governments and businesses at two self-serve “card lock” facilities in Gunnison and Crested Butte, as well as a handful of retail gas stations at both ends of the valley.
In 1998 Sweitzer Oil was purchased by Gunnison County Electric Association (GCEA) and two other rural electric cooperatives to cope with anticipated changes in a dynamic energy market.
According to an August 4 press release from GCEA, in the mid-1990s rural electric cooperatives were concerned about a practice called retail wheeling. At the time, regulations about large energy providers transmitting energy across another company’s power lines were lax and some of these large power providers attempted to entice rural consumers with cheap electric prices.
The practice was later prohibited in Colorado after transmission and reliability problems caused sustained outages in many rural areas.
But in 1998 GCEA formed Paradigm Services LLC as a partnership with Yampa Valley Electric and Holy Cross Electric in an effort to diversify operations and protect themselves against retail wheeling.
 “Over the past few years the Paradigm board has recognized that the gas and oil business is changing. Competition from larger distributors, the economic downturn, and market conditions have made it difficult for Sweitzer Oil to survive in a small community,” the GCEA press release reads. “The Paradigm board was faced with a very difficult business decision last week when it determined that it is time to sell Sweitzer Oil Company… GCEA’s board agrees that the time is ripe to sell Sweitzer Oil so that GCEA may focus exclusively on its core business of electric energy. “
The release further states, “Paradigm is actively pursuing the sale of Sweitzer Oil and would like to find a buyer that could continue its operations. In the meantime, Paradigm will begin drawing down Sweitzer’s inventory in preparation for closing.”
Mike Hardin, Paradigm chief executive officer, said he is concerned about local customers who have supported Sweitzer Oil for so many years. “I would like to assure them that we are doing our best during these difficult times to make the transition as smooth as possible,” Hardin said.
In Crested Butte, Sweitzer Oil provides fuel for the only two gas stations, True Value and the Gas Café. Gas Café owner Andrew Gitin says Sweitzer will continue to provide the store with gas and diesel until August 30.
True Value manager Trent Sweitzer, whose family used to own the oil company, says the hardware store/gas station is in the same position. “We’re looking into switching suppliers. We just have to find one that serves this area. I think there are two nearby,” he says. “We’re trying to work together with the Gas Café. We’ll probably go with the same supplier,” Sweitzer says.
Gitin says Alta Fuels of Alamosa and Parish Oil of Montrose are two distributors they’re considering.
But while gas stations can form a contract with a new fuel distributor, local governments and businesses that use either of the Sweitzer-owned card lock facilities don’t have that option to keep bulk or tax free fuel available at the pumps.
The towns of Crested Butte, Mt. Crested Butte, the city of Gunnison, and Gunnison County, as well as agencies like the Rural Transportation Authority and Mountain Express, all purchase tax-free gas from Sweitzer’s card lock facilities.
The card locks are scheduled to close on September 30, according to GCEA’s press release.
For many public officials, interviews for this story were the first they had heard of the Sweitzer situation. “I guess we’ll be looking for a new place to fill up,” says Mountain Express assistant manager Chris Larsen.
Larsen says the tax-free gas Mountain Express purchases from the Sweitzer card lock on Belleview Avenue in Crested Butte is much cheaper than retail fuel. “We don’t pay that 20 or 30 cent tax that everyone else does. That makes a huge difference to us,” he says.
Larsen said Mountain Express had investigated building its own fuel storage tank as part of the new bus barn facility, but they were unable to secure the grant monies needed to build it.
Crested Butte town manager Susan Parker says the town has also been talking about gas storage for a while. “It’s prohibitively expensive,” she says of building a fuel storage facility, which requires extra safety measures and double wall thickness.
If the card lock facility closes, Parker says, “For us the immediate impact is we would have to use the retail gas, which would definitely affect the budget.” All of the town vehicles are filled at the card lock facility. Parker says public works and the marshals use the most fuel among town departments.
“It’s the first I’ve heard of it. We’ll have to start thinking about it,” Parker says.
Mt. Crested Butte town manager Joe Fitzpatrick said he was also unaware that Sweitzer was closing. Fitzpatrick said he hoped another fuel provider would take over the operation of the card lock and continue to provide tax-free fuel. With the town already under a tight budget, Fitzpatrick said, he hadn’t given much thought to how the town will be impacted if tax-free gas is unavailable. “It’s huge. I don’t know what we’ll do.”