In 1973, BP closed some 200 full-service stations in Maryland to replace them with 60 gas-only outlets, signifying the beginning of a new "gas-and-go" era.
BP claimed that it would cut out all the "needless frills" such as credit cards, restrooms, free air and service and provide the consumer instead with cheaper gas. By the time the oil embargo began to cut supplies in late 1973, BP had the highest prices in the metropolitan area.
The incentive for oil companies to follow BP in the mass conversion to gas-only was not cheaper gas to the consumer, but cheaper operating costs and the huge increase in the profitability of refinery sales of gasoline. From an average gross profit of about nine cents per gallon in 1974, the wholesale gross profit for unleaded grades of gas has since exceeded 30 cents a gallon. While retail dealers' retail margin of profit was dropping 24 percent between 1974 and 1976 (to 7.4 cents), the oil companies' wholesale margins increased almost 60 percent.
The profits that the oil companies used to earn by producing cheap, foreign $2-a-barrel, pre-embargo crude oil are now being recovered from the retail gasoline market. As a result, thousands of their full-service locations have since been converted to gas-only, self-service outlets. In the past two years, 35,000 more full-serves have been closed. In Maryland and the District, there are more than 1,000 locations, including convenience stores, that sell gas only.
The Maryland legislature and the D.C. Council became so alarmed at the mass closing of full-service gasoline stations that each passed, and has renewed, a moratorium to halt conversions to gas-only. They realized that as service bays were eliminated, they would never be replaced. These laws were strongly supported by the American Automobile Association and consumer groups that expressed fears for motoring safety and the availability of emergency road services. In many areas, AAA has had difficulty finding remaining stations with tow-trucks to serve as AAA contractors. In D.C., AAA had to purchase its own tow- trucks to provide emergency service.
The recent cold wave has again demonstrated the inadequacy of remaining facilities. Motorists in many areas have had to wait two or three days instead of two or three hours for emergency service. Service bays have been jam-packed with stalled automobiles. Even in normal weather, motorists may have to wait a couple of days for appointments for repairs or maintenance.
In pre-embargo days, oil companies advertised the superior service available at their service stations and the excellence of their lines of tires, batteries and accessories. Today, some major companies, such as Mobil, have dropped tires, batteries and accessories.
Oil companies are preying on the motorists' continuing search for lower gasoline prices by pushing the unattended (cashier-only) self-service concept. They believe they can cut their investment and maintenance costs to a minimum, then push large volumes by trimming the dealers' profit margins to the bone, although the companies' wholesale price remains firm.
Some companies threaten to close stations if they do not pump a prescribed volume. Crown's lease has a minimum gallonage clause, stating that a dealer's affiliation may be terminated if he fails to meet a certain minimum for three consecutive months.
Service stations traditionally sell much more than gas. They take care of those who cannot start their cars; the flat tire or the broken fan belt on the way home; the winter check-up before the big snow; the annual tune-up while the owner is at work; the emergency restroom and the ready directions for lost motorists.
To perform the service expected of him, the full-service station owner needs an equipment investment of around $100,000. Each time a new gas- and-go enters his area, it threatens the stability of his whole operation. He may have to add to the estimated 5,000 service station employees laid off in the past five years and cut back on his services.
The balance between full-service locations and gas-and-go's has been destroyed in favor of the latter. It is essential to preserve the surviving but rapidly disappearing full-service operations for the convenience and safety of motorists.