Moore, Alvis J__. Owens, Hon. Wayne, a U.S. Representative from Utah. Tubbs, Richard _. ADDITIONAL ARTICLES, LETTERS, AND STATEMENTS Castonguay, Paul R., president, Metro 500, Inc., letter---- Lancaster, Hal, article in the Wall Street Journal_. Metro 500 Asks Minnesota Legislature for Act To Insure Fair Distribution of Gas, press release___ (III) IMPACT OF GASOLINE MARKETING PRACTICES ON THE CONSUMER SATURDAY, MARCH 17, 1973 U.S. SENATE, COMMITTEE ON COMMERCE, The subcommittee met at 9:45 a.m. in the auditorium, State Office Building, Salt Lake City, Utah, Hon. Frank E. Moss (chairman of the subcommittee) presiding. OPENING STATEMENT BY SENATOR MOSS Senator Moss. The hearing will come to order. This is a public hearing of the Consumer Subcommittee of the U.S. Senate. Becuase of time factors, we had to hold it on Saturday. We need to be back in Washington by Monday, so I appreciate your coming here on a day that normally is a day off. A number of other members of the subcommittee had indicated that they wanted to attend the hearing, and the Saturday part fitted in all right with their schedules, but the fact that it is St. Patrick's Day didn't, and many of them are involved in the celebration of this day. The subject of our hearing is the impact of gasoline marketing practices on the consumer. The automobile, and those costs which go hand-in-hand with running the automobile, are critical consumer issues of the day. Congress has acted, through the Motor Vehicles Safety Act and my proposed warranty bill, to eliminate some of the burdens placed upon the vehicle owner as a result of the manufacture of the product itself. Additionally, we are currently working on establishing a National No-Fault Motor Vehicle Insurance Act to further aid the motorist in his dealings with that component of ownership of the automobile. But second to depreciation, the motorist spends more on gasoline than any other costs associated with motor vehicle ownership. The average automobile is driven almost 10,000 miles each year and consumes more than 730 gallons of gasoline. Gasoline marketing has critical effects on society. Although independently owned and operated stations amount to about 7 percent of the service stations in the country, between 25 percent and 30 percent of all gasoline sales are made by these stations. Today we are seeing a diminished supply of gasoline for independent retailers, and the impact of this fact on consumer choice and price will soon become substantial. Staff member assigned to this hearing: Edward Merlis. We intend at these hearings to look at the nature of the problems which have caused gasoline prices to escalate over the past few months and supply to diminish. The charges and allegations that have been made deserve close scrutiny because these issues will have great impact upon the people of Utah and the United States. We must examine the nature of the problems and remedies. For instance, we need to investigate the impact of the major vertically integrated oil companies "fighting brands" or "secondary brands" of gasoline which are sold at reduced prices. What can we learn from the history of gasoline wars on the west coast during the 1930's? Are the charges of threats made toward independent retailers to raise prices or have supply cut off valid? How extensive is the inventory shortage of gasoline? Is there any plan or systematic effort being made to destroy and weaken independent competitors and to raise consumer prices? Is legislation needed to prohibit arbitrary termination and cancellation of contracts and leases? Other issues also need to be examined. Should Federal law require suppliers to sell to anyone at the same price? What will be the effect of lifting the quotas on the importation of crude oil? Are the common carrier pipelines being used that all may make proper use of them? Should the Federal Government relax its concern for environmental considerations and provide subsidies for the construction of refineries? These are among the issues which are being raised in regard to this critical problem. We will take testimony here and perhaps throughout the country in our efforts to learn the scope of the problem and fashion appropriate remedies so that the competitive ability of the independent gasoline marketers remains intact and the consumer pays the lowest possible price consistent with the free enterprise system. This matter is one that certainly concerns every citizen of this country and has ramifications that spread far out into our economic spectrum. Therefore the record that we assemble will be of great importance. There will be other hearings as this matter is one that deserves long and careful attention. There isn't any easy, snap answer. We know that, and that is the reason we've had to begin by building a record, and coming, first of all, out into the communities and areas of our country where the people will have a chance to address themselves to the problem. I didn't think this was the kind of investigation to start in Washington, although it may end up back there. I'm pleased today that Congressman Wayne Owens, who represents this district in the U.S. House of Representatives will be here. Wayne will have a statement. I've invited him to sit with me, as long as he is able to stay during the day, because if any legislation comes out of this investigation it will also have to be considered on the House side. This is the chance for him to begin to hear that evidence firsthand. Now, as we proceed, witnesses will be asked to come and sit at the table, and speak into the microphone clearly so that all can hear. We have an overflow audience, I see, and that's good. I'm pleased because this is a matter of great concern, and I'me glad that many people have availed themselves of the chance to hear what is being said, and what will be in the record. |