Gas stations: full pumps but empty cash registers
Many gasoline retailers with brimming pumps also have empty pockets as sales continue to slip due to conservation by motorists. One result: a dramatic decline in the number of service stations, a trend that poses potential dangers for consumers.
In a little-noticed report issued in February on the decline of gasoline dealers, the US Department of Commerce forecast that 6,540 more stations would go out of business by December of this year, leaving approximately 152,000.The National Petroleum News and other authoritative oil industry publications more recently said the decline will be more precipitous.
Robert Lohse, a spokesman for the 60,000-member Service Station Dealers of America (SSDA), says he believes the rate of decline has been, and will be, greater. "In the last two years we have seen a loss of approximately 20 percent a year of all stations in the US, and we expect this trend to continue at this rate or worse," he says.
Exactly what the ultimate effect of this waning number -- down from more than 226,000 stations in 1972 -- will be on motorists is unknown. But judging from interviews with the SSDA in Washington, D.C., some of the association's dealer members across the country, and major oil company analysts, these trends are emerging:
* Gasoline will be harder to get in rural areas -- and those stations that remain open may charge much higher prices.
In parts of North Carolina, for instance, conservation and the gas glut have forced many stations out of business, with motorists having to look harder for gas even though it is plentiful at surviving stations. Five years ago, the North Carolina Service Station Association had about 600 members; it now has about 185. As a result, says Michale Miksche, the executive director of the group, some of the remaining stations are charging higher prices due to less competition.
* In metropolitan areas, such as greater New York City, some dealers are providing less service to curb expenses and bolster profits.
Although there seems to be a general trend throughout the US of more service coming on the heels of efforts to move slow-selling gasoline stocks, it is also apparent that many stations are shorter staffed and thus have less time for the "full service" amenities such as windshield washing and checking the oil.
Norman Graps, executive director of the United Gasoline Retailers of Western New York, headquartered in Buffalo, is concerned about a related problem: Major oil company owned and operated stations are undercutting independent dealers on price, forcing out the independents, but then provide little service to customers.
The SSDA claims, in fact, that major oil companies have launched a concerted campaign to take over the gasoline station industry. Rep. Berkley Bedell (d) of Iowa, with the backing of the association, introduced a bill earlier this year that would require most of the large refiners to stop operating service stations directly with their own salaried employees.
Similar so-called "divorcement" legislation has failed in past years, and most observers say this measure does not have a good chance this year.
A recent report prepared by the US Department of Energy found that there was no evidence of "massive movement by refiners into the direct retailing of gasoline." The report also found that there was no evidence to support the claim "that refiners are subsidizing the sale of gasoline at retail as part of a predatory campaign."
The number of company owned stations has declined along with the decline of independents, Department of Commerce figures show. In 1972, there were 44,200 company-owned stations; at the beginning of this year, there were 28,800.
API reports that in 1968, 3,740 new stations were built; exactly 10 years later, only 336 were constructed.
According to the latest American Automobile Association national survey of 6, 000 stations, the average price of gasoline of all grades was about $1.38 a gallon, compared with $1.25 the year before.