AMENDEDSUPPLEMENT AND AMENDMENT TO
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                     STOCK PURCHASE AND SEPARATION AGREEMENT
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     This  Amended  Supplement  and  Amendment  To Stock Purchase and Separation
Agreement  is  executed  this  2nd  day  of  October,  2003,  and is intended to
supplement  (i)  that  certain  Supplement  and  Amendment To Stock Purchase and
Separation  Agreement,  dated September 12, 2003 and (ii) the Stock Purchase and
Separation  Agreement, dated July 22, 2003 (hereafter collectively called "Stock
Purchase  Agreement"),  executed  by  and  between  Jorge Bracamontes (hereafter
"Employee") and Penn-Octane Corporation (hereafter "Penn-Octane"); and

     WHEREAS,  subsequent  to  the execution of the Stock Purchase Agreement the
parties  have  agreed  to  certain clarifications and modifications of the Stock
Purchase  Agreement;  and

     NOW,  THEREFORE,  in consideration of the mutual promises herein contained,
the  parties  agree  as  follows:

     1.     The  parties  hereby  agree  to  replace  Section  5(e) of the Stock
Purchase  Agreement  to  hereby  read  as  follows:

     "Within  sixty (60) days of Closing, Penn-Octane Corporation shall cause to
be issued to Employee 21,818 shares of newly issued and restricted common shares
of Penn-Octane Corporation.  The parties agree that the shares being received by
Employee  pursuant  to  this  section  5(e)  represents  additional compensation
received  by Employee for severance compensation received by Employee related to
any  of  his  prior  positions  or  employment  with



Penn-Octane Corporation, Termatsal, S.A. de C.V., Penn-Octane de Mexico, S.A. de
C.V.,  and  Tergas,  S.A.  de  C.V.

     2.     The  parties  hereby  agree  to  replace  Section  5(b) of the Stock
Purchase  Agreement  to  hereby  read  as  follows:

     A  loan  extended  by Penn-Octane to Bracamontes in the principal amount of
$498,000.00 (U.S. dollars), dated March 25, 2000 and a loan extended to the wife
of  Bracamontes  in  the  principal  amount  of  approximately  $46,603.00 (U.S.
dollars),  dated March 26, 2000, which loans were utilized by them to purchase a
total  of  215,000  common  shares of Penn-Octane stock shall be forgiven on the
Closing  Date.  The  parties agree that the forgiveness of the loans pursuant to
this  section  5(b)  represents additional compensation received by Employee for
severance  compensation  received  by  Employee  related  to  any  of  his prior
positions  or  employment with Penn-Octane Corporation, Termatsal, S.A. de C.V.,
Penn-Octane de Mexico, S.A. de C.V., and Tergas, S.A. de C.V.

     IN WITNESS WHEREOF, the parties set their hands in agreement as of the date
first  above  written.

                                       PENN OCTANE CORPORATION


                                       By:____________________________________
                                                 IAN  BOTHWELL


                                       By:____________________________________
                                            JORGE  BRACAMONTES