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Gas stations of future will be scarce and you'll serve yourself

By Lucia MouatStaff correspondent of The Christian Science Monitor / March 12, 1981



Chicago

The gas station of the future? It's apt to sell more expensive fuel and offer fewer amenities -- from washrooms to windshield cleaning. City drivers are likely to find the pumps in surviving neighborhood stations to be of the self-serve variety, aimed at high-volume sales. Rural motorists may have to drive extra miles to find a station at all. Fewer national credit cards will apply.

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Most of these trends were already well under way before President Reagan lifted controls on oil prices six weeks ago. An estimated one-third of the country's gas stations have closed over the last decade.

But, in the opinion of most experts who keep close watch on energy developments, the President's executive order has effectively hastened the shakedown in gasoline marketing and the planned pullout of major oil companies from less profitable regions far from their refineries or supply terminals. By the end of this year another 34,000 service stations will have closed, according to estimates of the Service Station Dealers of America. Sources who follow the oil industry closely seem to agree that there are about 180,000 service stations left in the United States.

While it is generally conceded that the nation may have an oversupply of gas stations -- they sprang up particularly fast in the 1960s -- concern is growing on Capitol Hill, and among those who care about small business survival, over whether or not the extra push of early decontrol puts the average independent gasoline dealer -- and ultimately the motorist -- in a uniquely unfair economic position.

Many dealers have complained to Washington that they have had trouble getting the oil companies, which often undersell their competitors in self-service retail operations of their own, to continue supplying them with gasoline in accordance with their contracts.

The concern of those monitoring gas marketing trends is that more dealers will be dropped unless they can maintain high-volume sales. As one longtime observer says: "Any dealer who cannot sell more than 60,000 gallons a month had better start looking elsewhere for work." Groups such as the American Automobile Association, which depends heavily on stations in outlying areas to provide help for its emergency road service, admit to concern over the pullout by major refiners from weak market areas and the impact this could have on the number of stations in rural areas.

But free-market economists and oil company spokesmen insist the concern is much ado about nothing. They point out that there are ample supplies of gasoline and say that motorists are unlikely to be left in the lurch in any area of the country.

"Why would anybody not sell gas in any area when it can be sold at a profit?" asks American Petroleum Institute spokesman Gus Ensz.

Confirms a Department of Energy spokesman: "With decontrol, the price tends to be higher but the service should still be there."

Some major oil companies have voluntarily assured dealers they will continue to supply them with gas for a certain specified period. Mobil Oil, which expects to complete its long-announced pullout from the Rocky Mountain states by 1982, has assured its dealer-contractors that it will continue to supply them with gas for one year beyond decontrol. "We're trying to minimize the market impact; no one should be strapped for supplies," says Mobil spokesman John Flynt.

But not all refiners offer such assurances, and some, in spite of promises, have cut off dealer supplies. Those market facts are one reason why a safeguard bill on Capitol Hill sponsored by Rep. Berkley Bedell (D) of Iowa and Sen. Howard Metzenbaum (D) of Ohio is rapidly gathering support and is slated soon for committee hearings in both houses of Congress.

The bill would bar the 16 major oil companies from owning and operating retail stations. (About 10 percent of the nation's service stations are directly owned and run by refiners.) It also would get at discriminatory pricing by requiring refiners to sell gas to any customers on the same terms at the same price. Lastly, it would allow a dealer to break free of an exclusive supply arrangement with one refiner if a better offer were available. Most dealers have had exclusive supply contracts with one oil company, which can effectively control everything from the amount of gas he receives and his hours of operation to the price of the product and terms of his lease.

The major oil companies oppose the bill -- particularly its bid to make them drop retail operations. Most dealers, on the other hand, consider the legislation vital to their survival. "Without these safeguards there would definitely be fewer outlets and higher prices," notes Robert Lohse of the Service Station Dealers of America.

A source on the House Small Business Committee, which will hold hearings on the Bedell bill, notes that the legislation is basically an attempt to put big and small competitors in gas marketing on a more equal footing. "Right now, it's a market where all the cards are stacked in the refiner's deck," he says. "The issue is whether the consumer will be able to buy gas from locally owned small business and whether there will be variety or 8-to-10 large companies that sell you gas -- that's the way things are headed now."