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MAJOR OIL COMPANIES CONTINUE MOVE INTO DIRECT MARKETING; GROWTH COMES AT EXPENSE OF INDEPENDENT MARKETERS

 MAJOR OIL COMPANIES CONTINUE MOVE INTO DIRECT MARKETING;
 GROWTH COMES AT EXPENSE OF INDEPENDENT MARKETERS
 WASHINGTON, Jan. 21 /PRNewswire/ -- Major oil companies are continuing their move into company-owned retail stations, according to a just-released government report, and it appears they are doing so at the expense of independent marketers and dealers, many of whom must compete against the very companies that supply them. Sales through company-operated outlets have increased steadily for six straight years, according to the Energy Information Administration's "Performance Profiles of Major Energy Producers 1990." From 1980 through 1990, sales through company-ops increased 92 percent, while the total volume of gasoline distributed nationally increased about seven percent.
 "The trend here is very clear; major oil companies have decided they want a much greater direct presence in the retail gasoline market, and they are apparently going to do whatever it takes to accomplish that goal," said Charles Sewell, spokesman for the National Coalition for a Competitive Petroleum Market (NCCPM), an umbrella group representing independent petroleum marketers, convenience store owners, and truck stop operators.
 The report reflects a long-term trend in the decline of independently-operated stations versus the number of major oil company-operated outlets. The number of dealer stations, for instance, declined from approximately 91,000 in 1981 to 42,000 in 1990, according to the report, while the number of company-operated outlets rose from just under 9,000 to slightly over 11,000, and that number is rising.
 This continued movement into the retail marketplace has clearly come at the expense of dealers and marketers. A 1991 survey revealed that more than three-quarters of the marketers experienced decreased income during the 1990-91 period, and that more than half of them were operating in the red.
 Sewell noted that over the past 18 months there have been widespread instances of major oil companies selling gasoline for more at wholesale to their independent marketers and dealers than they charge at retail at their company-operated stations. That practice, he said, has forced many of the independents to sell gasoline at a loss.
 The NCCPM, which represents several national associations and nearly 40 state organizations, is supporting legislation in Congress which would prohibit major oil companies from discriminating against their independent marketers and dealers. The legislation, H.R. 2966 in the House, and S. 2041 in the Senate, is entitled the Petroleum Marketing Competition Enhancement Act.
 "The fundamental question here," said Sewell, "is whether we want a continuation of the competition that results from literally tens of thousands of competitors in the marketplace, or whether we would rather see a market controlled by a handful of major oil companies."
 -0- 1/21/92
 /CONTACT: Charles Sewell of the National Coalition for a Competitive Petroleum Market, 703-481-0180/ CO: National Coalition for a Competitive Petroleum Market ST: District of Columbia IN: OIL SU:


SB -- DC013 -- 1804 01/21/92 12:01 EST
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Publication:PR Newswire
Date:Jan 21, 1992
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