
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, April 4, 1990                   TAG: 9004040617
SECTION: EDITORIAL                    PAGE: A-12   EDITION: METRO 
SOURCE: 
DATELINE:                                 LENGTH: Medium

GAS MARKETING/ HEAVY HAND DESCENDS ON BIG OIL

OIL COMPANIES make handy political targets. They are big and rich, and from time to time they can be counted on, like Exxon with the Alaskan oil spill, to give themselves black eyes. It can be tempting to line up against big oil and for the little guys and gals, whoever they may be.

But SB235, passed by the recent General Assembly, goes too far. Under the guise of helping neighborhood service stations, it would place heavy restraints on the operations of oil companies in Virginia. When it reaches his desk, Gov. Wilder should veto it.

Introduced by Sen. Elmon Gray, D-Sussex, SB235 would allow dealers who already pump one company's branded gasoline to sell other kinds as well. It would restrict transfer of service-station franchises and hamper oil companies from building their own stations. It is unlike law in any other state.

The bill seems to aim at wiping out the familiar product names and allowing gasoline to be sold unbranded. Granted, there may not be much difference among various brands: The discount station is selling gasoline it gets from one or more of the big oil companies happy to have an outlet for surplus fuel. That's no reason for the law to try nullifying any company's effort to develop and promote its own brand. There may not be much difference among the many cigarette brands either, but the state's not implying they should all be sold as generic smokes.

Where generic products are available, they are cheaper because they can compete in price with brand names. If such competition doesn't exist, the consumer has fewer choices, and we all know what that means. Asked by Del. Alan A. Diamonstein, D-Newport News, for comment on SB235, the Federal Trade Commission submitted an 11-page letter expressing its belief that the bill "may lessen competition among motor-fuel dealers and raise gasoline and diesel prices to Virginia consumers and visitors."

The same letter cited a U.S. Department of Energy study in 1984 concluding that major oil companies were not to blame for increased pressures on gasoline retailers. Rather, it said, these pressures resulted from a drop in gasoline consumption and "a continuing trend toward the use of more efficient, high-volume retail outlets."

Gasoline consumption is rising again, which may help the smaller retailers. Meantime, those high-volume outlets obviously are what most consumers prefer; the law should not be used to steer their vehicles back to neighborhood stations.

by CNB