Gas dealers won't take blame for high prices

October 17, 1990|By Ross Hetrick | Ross Hetrick,Evening Sun Staff

BOWIE -- Maryland gasoline station operators have a message for the public: Don't blame us.

Gasoline dealers from around the state yesterday gathered in a park in Prince George's County to tell newspaper and television reporters that skyrocketing prices are not their fault.

Dealers have complained that they have taken the brunt of consumers' frustration as gas prices have risen since Iraq invaded Kuwait on Aug. 2.

"Every day dealers are being accused of being part of a gouging conspiracy," said Charles E. Warns, first vice president of the Greater Washington/Maryland Service Station and Automotive Repair Association. "We want to make sure that they are not angry at us," he said, talking from the back of a flatbed truck to a crowd of about 200 people.

Warns, who operates two Exxon stations in the Baltimore area, said customers ask him why he is changing the price sign every few days. With 26 price increases by his supplier in the 78 days since the invasion, "it is logical that I will be climbing up that pole three times a week," Warns said.

Warns said dealers receive two to three shipments every week and must pay the price of the product at the time of delivery, not the price when they ordered it. The price increases have also pushed the cost of a tanker load of gas from about $8,500 to $12,500, increasing dealers' carrying costs.

Louis L. Goldstein, the state comptroller of the treasury, was also at the gathering, talking from a lectern covered with re-elect Goldstein bumper stickers.

"You're caught between the rock of the oil companies' greed and the hard place of consumer anger," Goldstein said. "Between the frying pan and the fire."

But he said the stations are in a better position that they would have been if the state hadn't passed the divorcement law in 1973. That law requires that stations be operated by independent businesses, even though the oil companies may own the property and lease it to the operators.

About 70 percent of Maryland stations receive their oil directly from the major oil companies.

The other stations buy it from oil distributors called jobbers.

Goldstein said the oil price to the jobbers had been increased during one period by 25.6 percent, nearly twice the 14.6 percent increase to stations supplied directly by the oil companies.

But after protests from state officials, oil companies brought the price to jobbers in line with that to direct dealers, Goldstein said. "I guess it was the case of the squeaky wheel getting the oil price break, and I'm glad it worked," he said.

A special state joint legislative committee is also investigating that issue.

Goldstein took a swipe at suggestions that the federal government should develop a national allocation system in the event of oil shortages. Calling the past federal allocation system "a mess," Goldstein said he has been urging Maryland congressmen and senators to oppose a federal system in favor of state allocation.

"I have tried to make them see how important it is for states that can operate a fair and equitable allocation program to be allowed to do so," he said.

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