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SACRAMENTO, Calif. -- Oil companies got a split decision yesterday on two bills that supporters said would inject more competition into California's gasoline market and help hold down the highest gas prices in the country.
The Assembly Business and Professions Committee rejected a bill that would have allowed service stations owned by oil company franchisees to shop around for their gasoline supplies. But the Senate Energy, Utilities and Communications Committee approved a bill that bars oil companies from, in effect, charging different wholesale prices to company-owned stations and franchisees in the same area.
The Western States Petroleum Association (WPMA) opposed both bills, arguing they would have the opposite effect. The first bill would allow oil company franchisees, which make up 70 percent of the service stations in California, to buy gas directly from the oil company or from a wholesaler that sells the company's products.
Dennis DeCota, executive director of the California Service Station and Automotive Repair Association, which represents 620 station operators, said the bill would prevent oil companies from fixing prices by zones and instead allow franchisees to buy the cheapest available fuel produced by their oil company.
The second bill bars oil companies from charging a franchisee more for gasoline than the "imputed wholesale price" for gas at a company-owned station supplied by trucks from the same loading terminal. It also would prohibit oil companies from buying up independent stations after Jan. 1, 2005 and trying to set or influence retail prices at stations not owned by the company.
"This bill would help me compete on a more level playing field," said DeCota, who testified for both bills. "My members are being forced out of business. We cannot stand the tide" of company-owned stations.
Besides the Western States Petroleum Association, the California Chamber of Commerce, California Manufacturers & Technology Association and some station operators opposed the bills.
In addition to DeCota, supporters of the bills included the Automotive Repair Association, the California Small Business Association and two consumer groups, the Foundation for Taxpayer & Consumer Rights and the Utility Consumers' Action Network.