EXTENSIONS of REMARKS October 17, 2000 EXTENSIONS of REMARKS
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23046 EXTENSIONS OF REMARKS October 17, 2000 EXTENSIONS OF REMARKS THE WHOLESALE MOTOR FUEL ferent way. In his situation, because of pricing tween ownership of gas stations and the high FAIRNESS AND COMPETITION discrimination, he buys motor fuel at a high price of motor fuel. RESTORATION ACT wholesale price and is forced to sell it for less In Humboldt County, California, pump prices than he paid for it in order to remain competi- continue to exceed $2.00 for a gallon of reg- HON. MIKE THOMPSON tive. ular (unleaded) gasoline, evidencing the OF CALIFORNIA The bill I am introducing today seeks to stop unique position of the major oil companies to IN THE HOUSE OF REPRESENTATIVES these unfair and anti-competitive practices. exert undue influence on the price of motor Tuesday, October 17, 2000 The ‘‘Wholesale Motor Fuel Fairness and fuels. In California, the six major refineries in Competition Restoration Act’’ addresses sev- California control 92% of all oil refining in the Mr. THOMPSON of California. Mr. Speaker, eral of the major factors that have been identi- state, whereas the top six refineries in Texas today I am introducing the ‘‘Wholesale Motor fied by industry experts as contributing to the control only 60% of that state’s gasoline pro- Fuel Fairness and Competition Restoration unfair and unjustified pricing of gasoline, in- duction. This inordinate market domination al- Act, ’’ legislation designed to restore fair and cluding discriminatory pricing, red-lining, price lows companies to practice discriminatory pric- competitive practices to the wholesale sale of zoning and company ownership of retail sta- ing practices that favor some customers over motor fuel. tions. others. It allows them to target certain markets Beyond the per barrel price of crude oil, Discriminatory pricing occurs when terminal in order to gain unfair advantage and drive out there are a number of other factors that influ- facility owners and operators charge different competitors. It is the kind of market practice ence the retail pump price Americans pay for prices for gasoline depending on the type of that warrants the bill I am proposing today. gasoline and diesel fuel, including those re- contractual relationship that the station has Mr. Speaker, the Wholesale Motor Fuel lated to supply, refining, consumer demand with the refinery. In my district for example, Fairness and Competition Restoration Act will and, most important, oil company cost, pricing motor fuel sold through an oil-company owned restore fairness and competition to the motor and marketing practices. station wholesales is sometimes twenty to thir- fuel industry, not just in California but across Several cost, pricing and marketing prac- ty cents less per gallon than motor fuel being the nation. I urge its prompt consideration. tices employed by the oil companies are unfair sold to an independent. This is patently unfair f and anti-competitive and contribute to the un- and anti-competitive. justified price Americans pay for fuel. Under Price zoning is a long-standing oil company TRANSPORTATION RECALL EN- the bill I am introducing today, many of them practice of setting artificially high or low prices HANCEMENT, ACCOUNTABILITY, would be expressly prohibited, if not made in certain areas to either maximize profit or im- AND DOCUMENTATION (TREAD) more difficult. These practices include price pede competition. If a particular city or even a ACT zoning, redlining, discriminatory wholesale fuel particular intersection is deemed to be espe- pricing, and a complex and complicated sys- cially profitable, oil companies will artificially SPEECH OF tem of cost allocation the companies use that inflate the price to gouge consumers or artifi- HON. TOM SAWYER hide the factors on which wholesale costs are cially deflate the price to driver competitors out OF OHIO based and published. of business. This, too, is unfair. IN THE HOUSE OF REPRESENTATIVES Mr. Speaker, for too long, the residents of Redlining is the practice engaged in by a California’s First Congressional District have terminal facility of refusing to sell motor fuel to Tuesday, October 10, 2000 paid too much for gasoline. For more than a a particular retail outlet that in some cases Mr. SAWYER. Mr. Speaker, in the course of year, they have paid some of the highest had previously purchased fuel from that facility the last century, Akron, Ohio, has built millions pump prices of any region in the country. For in an effort to eliminate or harm competition. of tires. Although passenger tires have not more than a year, they have paid well above The ‘‘Wholesale Motor Fuel Fairness and been built in Akron for more than 20 years, $2-a-gallon for regular unleaded gasoline. Competition Restoration Act’’ uses a two- Akron remains the center point in research Many others across the nation face similar un- pronged approach to address these unfair and development, technology, and command justified pricing. practices. First, it requires full disclosure by oil and control for this global industry. We care Last month, I met with U.S. Energy Sec- companies of their wholesale pricing practices. deeply about safety and we are profoundly retary Bill Richardson and brought to his atten- This means that oil companies will be required distressed over the deaths linked to the Fire- tion the unfair situation that confronts the resi- to reveal their pricing structure, including re- stone tires. The Akron community strongly dents of Northern California. I made it clear bates, refunds, and discounts, so that the supports the much-needed overhaul of tire that I and my constituents were not satisfied American people will finally be able to most regulation and oversight authority embodied in with the degree of attention the Department fully understand how these companies arrive the Transportation Recall Enhancement, Ac- was paying to gas prices in Northern Cali- at the price on the gas station sign. Currently, countability, and Documentation (TREAD) Act. fornia and I sent both him and the President much of this information is not publicly avail- It is our responsibility to bring tire regulation letters urging them to improve their scrutiny of able nor is collected by the Department of En- firmly into the 21st century. The current regu- oil company practices in California. ergy’s Information Administration. lations that make up the Federal Motor Vehi- Nonetheless, it is clear from my discussions Secondly, this bill will make it illegal for cle Safety Standards (FMVSS) Section 109 with fuel distributors and independent retailers companies to discriminate on price. It does were written in the mid-1960s, when bias tires that the wholesale motor fuel market is unfair this by requiring that the price charged at the still dominated the market. To be fair, National and anti-competitive. An independent fuel dis- terminal facility, where gasoline is loaded on Highway and Transportation Safety Adminis- tributor in my district recently related to me tanker trucks, is the same regardless of who tration (NHTSA) and the tire industry have that he is charged a price at the terminal facil- is purchasing it. By eliminating the price dis- been working for the last three years to ele- ity that is sometimes 30 cents higher than the crimination between company-owned stations, vate tire standards worldwide. price charged to company-owned or franchise franchisees, and independent operators, it will While we must all work together to demand distributors. Yet, his profit margin on a gallon for the first time introduce a level playing field the safest tire possible, we must also recog- of gasoline is at times less than one-half a into the motor fuel marketplace. nize that the industry cannot build a perfect cent! The third component of this legislation ad- tire. In the early part of the last century, in the Another district resident who owns a num- dresses oil company ownership of gas stations days of the Model T, cars carried as many as ber of gas stations is also a victim of some of by mandating the Federal Trade Commission four spare tires. In the 1950’s, there were cars these predatory pricing practices, but in a dif- to undertake a study into the relationship be- carrying two spares. Today, cars typically ● This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor. VerDate Aug 04 2004 01:21 Jan 12, 2005 Jkt 079102 PO 00000 Frm 00001 Fmt 0689 Sfmt 9920 E:\BR00\E17OC0.000 E17OC0 October 17, 2000 EXTENSIONS OF REMARKS 23047 carry only one. But the point remains: the only Fonoimoana, Junior Seau of the San Diego Mr. Speaker, I call upon the Prime Minister backup piece of equipment that comes on a Chargers, Joe Salvare’a of the Tennessee Ti- of the Independent and Sovereign State of car is a spare tire, and it is there on purpose. tans, Edwin Mulitalo of the Baltimore Ravens, Samoa and the Governor of the U.S. Territory Today’s tires are complex products. They Naomi Mulitauaopele of the Utah Starzz, of American Samoa to declare November 11th are highly engineered devices operating in Marcus Tuiasosopo of the Washington as National David Tua Day. It will be a day one of the most extraordinarily violent environ- Huskies, All-American UCLA discus thrower that will be remembered by Samoans through- ments of any consumer product we use in our Seilala Su’a, Yokozuna Sumo Grand Cham- out the world—the Samoan ‘‘David’’ going up ordinary daily lives. Modern cars develop pion Musashimaru, Ozeki Sumo Champion against the Goliath ‘‘Lennox Lewis’’—and we 100’s of horsepower, 100’s of pound-feet of Konishiki, WWF Wrestling Champion Tuifeai, all know the results of that famous encounter.