The Ashland Petroleum Co. will sell all 14 of its gas-and-go service stations in Maryland as a result of the implementation of the state's service station divestiture law, the company said.
The law, upheld recently by the U.S. Supreme Court, prohibits oil refiners or producers from operating service stations in the state, but the stations must be operated by lessee dealers or chain retailers who are not refiners.
The law was passed after an investigation by the state comptrollers office into the availability of gasoline supplies before and during the Arab Oil embargo in 1973 and 1974.
"At that time we found that company-operated stations were being supplied with all the gasoline they could sell, while dealers who leased stations or bought gasoline independently were being discriminated against."
According to a statement from Ashland, the oil company "would not be economically viable under the conventional lessee dealer mode of operations."
The company also said dealer operation was undesirable because the stations do not use credit cards, they have no service bays or sell tires, batteries and other accessoriers, a fair rental would be impossible for the typical lessee dealer to assume and the company could not guarantee a prospective dealer "that present allocation levels could be maintained . . ."
"Our properties in Maryland were acquired, planned, designed and constructed solely to accommodate high volume, low margin unbranded marketing where the owner of the properties can constantly monitor and control standards, hours of operation and prices," the company said. "The Maryland divorcement law simply precludes successful operation of these units by independent refiner/marketers committed to the high volume, low margin gas and go unbranded marketing system."
Ashland's stations in Maryland operate under the names of BiLo, HyFy, Payless and Red Head.