November  12,  1996


                             LETTER OF ASSIGNMENT


This  Letter  of  Assignment  the ("Assignment") is being entered into between
Mr.Roberto  Keoseyan  ("Assignor")  and  Penn Octane Corporation ("Assignee").
Whereas  Assignor  has  been granted a DINA Dealership the ("Dealership") from
Grupo  Dina, S.A. de C.V. ("Dina"), and Assignee wishes to purchase the rights
to  the  Dealership.

Assignor  confirms  it  has  obtained  the full rights to a newly granted Dina
Dealership.  The Dealership will be operational once Assignor has identified a
suitable  location  for  the Dealership which is approved by Dina and Assignor
demonstrates to Dina that it has met the required working capital requirements
(approximately  Ps.  4,000,000).    The  Dealership  has  been  granted for an
unlimited  period of time and may not be revoked if Assignee complies with the
terms  of  dealerships  established  by  Dina.   There are no other contingent
obligations  regarding  the  dealership  which  may affect the granting of the
Dealership  from Dina.  The Assignee is aware that the Dealership will need to
be  constructed  and  that  costs  associated  with  purchase and/or rental of
property  and  construction  of facility (collectively the "Construction") are
responsibility  of Assignee.  Assignor estimates that the Construction will be
approximately  Ps.  4,000,000.

Assignor further represents that it has the rights to assign the Dealership to
the  Assignee.

PURCHASE  PRICE

Assignor agrees to sell 100% of the rights of the Dealership of which 80% will
be  owned  by Assignee and 20% will be owned by three other individual parties
equally  the  ("Individuals"),  including  the  Assignor  in  exchange  or the
following:

Assignor  will  receive  the  sum  of  $75,000  as  follows:

1)          $25,000  week  of  November  19,  1996
2)          $50,000  payable  $10,000  per  month  for  10  months

Assignor  will  receive  100,000  stock  purchase  warrants  of  Penn  Octane
Corporation  the  ("Warrant").    The Warrants will be exercised at a price of
$3.00  per  share  and will expire 24 months from the date of this Assignment.

Assignor  will  receive  rights  to  obtain  future  warrants  in  Penn Octane
Corporation  based  on  an incentive program which will be developed within 90
days  from  the  date of this Assignment among Penn Octane Corporation and the
individuals,  and will be subject to Penn Octane Corporation's Board approval.

Assignor  will  receive  expense allowance of USD $5,000.00 payable in arrears
from the date of this Assignment.  This monthly allowance is separate from any
other  arrangements  between  Assignor  and  Assignee.

Assignor  will  be  appointed  as a director for Dina Dealership.  (Can't read
this  sentence)

ASSISTANCE  TO  FULFILL  DEALERSHIP  RESPONSIBILITIES

Assignor  will  cooperate with Assignee to ensure that all requirements of the
Dealership  are  met  and  complied  with:  (???)

NON  COMPETE

Assignor agrees that any other future opportunities connected with Dina and/or
the  dealership  will  be  considered  part  of  this  Assignment.

CONFIRMATION  FROM  DINA

Upon  execution of this Assignment, Assignor will present Dina with details of
the  Assignment  and  will  obtain  correspondence  from  Dina recognizing the
Assignment.

By  signing  below,  all  parties  agree  to  the  terms  of  this Assignment.


By:                                                 By:
Dina  Dealership                                       Penn Octane Corporation



/S/ ROBERTO  KEOSEYAN                             /S/ JERRY RICHTER
    -----------------                                 -------------
Roberto  Keoseyan                                     Jerry Richter, President
Assignor                                              Assignee
Dated:                                                Dated: November 15, 1996