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

DATE: THURSDAY, March 29, 1990                   TAG: 9003290599
SECTION: EDITORIAL                    PAGE: A-17   EDITION: METRO 
SOURCE: RAY L. GARLAND
DATELINE:                                 LENGTH: Long

VA. SHOULDN'T MEDDLE IN BUSINESS OF PUMPING GAS

The miracle is that allowing for inflation - and subtracting the considerable increase in gasoline taxes - this product is actually cheaper in the United States today than it was 25 years ago. And this equation takes no account of more fuel-efficient cars. Diminished cost in real terms may explain why the two-car family has become the American norm, and why commuters steadfastly resist car-pooling, HOV lanes and public transport.

The oil companies may be guilty of a great many things, but one thing they are not guilty of is failing to make their products available at all hours of the day in virtually every nook and cranny in the country. Which is a comforting thought when you are running on empty in the wilds of West Texas at 3 a.m., as I once found myself, when there appeared the welcome lights of an open station. Do you think this would have been the case if the government ran the show?

Well, the state of Virginia is preparing to get into the business of trying to run the show. And if Gov. Wilder is serious in his commitment to conservative principles of government, he will veto Senate Bill 235.

This is the bill introduced by Sen. Elmon Gray, D-Sussex, at the behest of independent gasoline retailers, to stop the expansion of refiner-owned stations, and to allow dealers operating under one company's logo to sell gasoline obtained from other sources. It also regulates the transfer of a franchise and prohibits oil companies from requiring their dealers to be on the premises more than 60 hours a month or open more than 96 hours a week.

And, in a provision tailor-made to promote litigation and give employment to lawyers, the bill specifies that where a refiner leases the property to a dealer, the rental "shall be based on commercially fair and reasonable standards, uniformly applied to all similarly situated dealers of the same refiner in the same geographic area." You could drive a tank truck through the holes in that language.

The plight of the small-station owner is no doubt real. The past or present owners of small groceries, pharmacies, hardware stores, etc., could no doubt tell a similar tale of woe. Undercapitalized and subject to the rough buffeting of big business, big government and big labor, they are hard pressed to survive. Much that is good is lost when local merchants throw in the towel. But consumers have voted with their feet, and there remains plenty of competition in a marketplace where even the giants must struggle to maintain their footing. Ask Sears.

The friendly neighborhood gas station, like the friendly corner druggist, is rapidly receding into American folklore. Gone are the days when kids were happy to get their start pumping gas for two bits an hour. Gone are the days when a rudimentary knowledge sufficed to diagnose the ills of a recalcitrant vehicle.

While the real world shifts rapidly under our feet, it is left to the politicians to pay lip service to folklore: "Let us save the family farm; let us make the world safe for small business." (But let's also raise the minimum wage and impose other regulations that keep the small farmer and the small retailer on the down escalator.)

Well, what is the public interest in SB235? The main public interest must always be to promote the widest choice at the cheapest price. This bill flies in the face of a clear trend in gasoline marketing toward the self-service super station located in a high-traffic corridor. Under this bill, for a period of one year, no refiner may construct and operate with company personnel any new station in Virginia, and it's the clear intent of the sponsors to make this ban permanent.

The problem is one of simple economics. The cost of erecting and opening a new super station is very high. A half-million would have to be considered a minimum, and a million would not be unusual. Very few "small" business owners can contemplate risking this amount of capital, and I suspect we will find that many of these so-called independent dealers are now large corporations with numerous stations.

By prohibiting refiners from opening new stations, the proponents of this legislation hope to force them to install independent operators. But SB235 also prohibits refiners from establishing sales quotas or hours of operation. It also attempts to ordain succession by a "designated family member." And to make this concoction complete, it stipulates that a franchised, independent dealer may sell, with impunity, the products of another refiner. That is, he may sell "Brand X" while inviting customers into his station under the colors of "Brand Y."

Despite the best efforts of advertising wizards to convince us to the contrary, all gasoline may be very much the same. Or it may not be. But aren't consumers entitled to their preference? And what of those who have invested millions to secure a market for their products?

So, under SB235, "the man who wears the star" may be putting a tiger in your tank. But the real tiger is the muddled mentality that would use the police power of the state to interfere with private contracts.