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INDEPENDENT PETROLEUM MARKETERS BEING DRIVEN OUT OF BUSINESS, WITNESSES TELL CONGRESS

 INDEPENDENT PETROLEUM MARKETERS BEING DRIVEN
 OUT OF BUSINESS, WITNESSES TELL CONGRESS
 WASHINGTON, June 11 /PRNewswire/ -- The National Coalition for a Competitive Petroleum Market issued the following:
 Whether by accident or by design, the nation's independent gasoline marketers are being driven out of business, and if that trend continues, motorists will be faced with decreased competition and higher prices, witnesses told a congressional subcommittee today. The problem, witness after witness told the House Subcommittee on Energy and Power, chaired by Rep. Philip R. Sta-?Ind.), is the practice by several major oil companies of undercutting their independent marketers by charging them wholesale prices which are higher than the retail price they charge at their own company- operated outlets, a practice known as "price inversions."
 "Substantial and undeniable evidence exists that over the past two years integrated refiners have exercised, and to this day continue to exercise, their enormous market power in a manner which renders the superior operating efficiencies of independent marketers irrelevant to competition," said Robert D. Phillips Jr., testifying on behalf of the National Coalition for a Competitive Petroleum Market (NCCPM). The NCCPM is an umbrella group representing thousands of independent petroleum marketers, service station dealers, convenience store owners, and truck stop operators.
 "Efficient competitors should not have their efficiencies rendered moot by the practices of large, deep-pocket refiners who can sell gasoline below their wholesalers' cost," Ron White, testifying on behalf of Petroleum Marketers Association of America, told the subcommittee. White, whose petroleum distribution company operates in Southern California, said that his company has already been driven out of the retail gasoline market, largely as a result of the price inversions.
 "I attribute a loss of at least $100,000 in 1991 directly to the price inversion faced by my business," David L. Perry, vice president of The Perry Oil Company, Beaverdam, Ohio, told the subcommittee. "The future of the independent petroleum marketing industry may rest with decisions this subcommittee makes relative to H.R. 2966," said Perry, who testified on behalf of the National Association of Truck Stop Owners.
 The marketer witnesses were unanimous in calling for the passage of H.R. 2966, the Petroleum Marketing Competition Enhancement Act. That legislation, introduced by Reps. Mike Synar (D-Okla.), Tom Bliley (R-Va.), Norm Lent (R-N.Y.), and Jim Cooper (D-Tenn.), would prohibit major oil companies from engaging in discriminatory pricing practices against their independent marketer customers.
 The marketer witnesses sharply disputed the claims by some major oil company officials that the inversions are a temporary phenomenon. "A 'temporary' price inversion is, for independent marketers, close kin to a 'temporary' earthquake. What may be temporary to a deep- pocketed integrated oil refiner is a lifetime to an independent marketer," said Phillips, who operates Purity Oil Co., a Tulsa, Okla.-based petroleum distributorship.
 Other witnesses agreed that the inversions are still occurring, and that whether or not the inversions are a deliberate attempt to underprice and "outlast" the independent marketers, the result is the same -- independent marketers are being driven from the market place in droves.
 -0- 6/11/92
 /CONTACT: Charles Sewell for The National Coalition for a Competitive Petroleum Market, 703-481-0180/ CO: The National Coalition for a Competitive Petroleum Market ST: District of Columbia IN: OIL SU: LEG


MP -- DC004 -- 9151 06/11/92 10:03 EDT
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Date:Jun 11, 1992
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