The Sept. 3 editorial “Let them pump,” criticizing my office’s lawsuit against a large wholesale gasoline supplier, contended that contracts requiring gas station dealers to purchase gas exclusively from one wholesaler are “generally benign,” presumably regardless of conditions in the local market.
But market conditions do matter. Vertically imposed supply restrictions, while perhaps “benign” in a truly competitive market, have great potential to harm competition and raise consumer prices in one dominated by a single large supplier. The unusually high prices at many D.C. pumps should surprise no one.
The District’s lawsuit challenging exclusive supply agreements is brought against a single, large gasoline wholesaler that supplies about 60 percent of the city’s stations, including almost all of the Exxon, Shell and Valero brand stations. The lawsuit alleges that these agreements’ exclusivity provisions violate the express terms of the District’s gasoline marketing law. The task of our office is to enforce the laws of the District, particularly where the goal is to reduce artificially high prices at the pump.
Under these circumstances, it is clearly in the public interest — and well worth using the admittedly limited resources of the District’s Office of the Attorney General — to seek an order preventing this wholesaler from continuing to enforce any exclusive supply agreements that the courts find to be unlawful.
Irvin B. Nathan, Washington
The writer is the D.C. attorney general.