PRESS RELEASES

For Immediate Release

Contact:
Anita Mangels
949-499-6995 Voice
714-269-0531 Cell

Proposed Gasoline Marketing Rules Could Backfire on Consumers

SACRAMENTO, April 3, 2003—Newly introduced legislation regulating gasoline distribution and marketing in California could backfire on consumers.

AB 146 (Kehoe) and SB 304 (Morrow) are the latest examples of proposals that have emerged and been rejected during previous periods of gasoline price volatility. The Federal Trade Commission, U.S. Department of Energy and many economists have pondered so-called divorcement, open supply and uniform wholesale pricing proposals, and concluded that such measures would lead to negative impacts on consumers.

“Published economic research demonstrates that anti-encroachment and divorcement laws tend to increase retail gasoline prices,” a deputy director of the Federal Trade Commission testified in January of this year.

Said Joe Sparano, President of the Western States Petroleum Association: “These bills, while well-intended, could be very harmful to consumers. The Department of Energy, Federal Trade Commission and others have consistently concluded laws such as these do nothing to lower prices, but could very likely increase them.”

The most recent proposals to go before the California statehouse were rejected by lawmakers in 1997 and 1998, and local versions met a similar fate in the San Diego and Bay Areas in 1998.

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