Fears of new gasoline shortages have inspired a move in the Virginia Senate to weaken drastically a House-passed ban on new oil company-operated service stations in the state.
Less than four weeks ago, the House of Delegates responded to the election year complaints of more than 3,000 independent service station operators by banning competition from new company-owned stations, 65 to 27.
Even warnings by the nation's chief antitrust official, Assistant Attorney General John H. Shenefield, that the Virginia legislation is "anticompetitive" and could lead to higher prices for consumers, did not deter the House.
Since the House vote on Jan. 22, however, the lack of oil experts from Iran has raised the specter of U.S. gasoline shortages and renewal of the long gasoline waiting lines that plagued motorists during the Arab oil embargo.
It appears probable that the Senate will rescue the oil producing and refining companies that operate service stations from what once appeared to be a certain legislative defeat.
"Our focus in the Senate has been on making sure we keep the largest possible gasoline allotment for Virginia," Sen. James T. Edmunds (D-Lunenburg), said in an interview. "This just wasn't an issue in the House."
In the House, the issue was protection of a conspicuous class of small businesses from what were portrayed as predatory practices by major oil companies.
The House responded by passing a bill that would prohibit any oil company from opening a company-operated service station in Virginia. Company-operated stations now in business -- about 10 percent of the total -- could stay open under the bill. Critics of the bill say it would stop the companies from opening more of the discount-priced, self-service stations that save money for consumers.
A Senate Agriculture and Natural Resources Subcommittee proposed amendments to the bill yesterday that would nearly reverse the House action. The subcommittee majority proposed that oil companies be allowed to open all the new stations they want, so long as none is located within two miles of a dealer-operated station selling the same brand of gas.The more stations, the legislators argue, the higher Virginia's allocation will be.
"This whole allotment argument is a smoke screen by the oil companies," James W. Heizer, executive secretary of the Virginia Gasoline Retailers Association, said today. Heizer insists that growth in the number of service stations is just as likely under the House bill, which simply requires that each new station be operated by an independent dealer.
Heizer and Del. Richard Saslaw (D-Fairfax), chief patron of the dealer protection bill, argue that limiting retail competition to independent operators is the best system for consumers. "It is a system that gives you thousands of individual price policy makers," Saslaw said.
"Isn't that better than having gasoline prices set by a handful of oil company vice presidents?"
Shenefield, however, argued before a House committee, that the Saslaw bill is likely to result in higher consumer prices. He said it could eliminate from Virginia the smaller producing and refining companies that operate high volume, low overhead "gas and go" stations.
This development, he said, would leave the field clear for the major oil companies to raise their prices at dealer-operated stations no longer confronted with the threat of increased price competition from the "gas an go" chains.
The Saslaw bill has posed a sophisticated trade regulation question for the General Assembly, which under a recent U.S. Supreme Court decision has clear authority to act. The high court has upheld a Maryland law requiring oil producers and refiners to get out of the service station business, an even more drastic approach than the original Saslaw bill.
The Senate committee is scheduled to act on the bill on Monday.