Below-Cost Setback

ARLINGTON, Va. -- The clock ticks with uncertainty concerning below-cost gasoline legislation.

The Petroleum Marketers Association of America (PMAA), which is pushing for a federal ban against selling gasoline below wholesale costs, thought it had securely tucked its initiative inside a comprehensive energy bill expected to be introduced in the Senate today by Senate Majority Tom Daschle (D-S.D.).

But PMAA President Dan Gilligan said 11th-hour efforts by representatives of the refining sector to yank the measure from the Energy Bill jeopardized the proposal's inclusion.

"We're still waiting and hoping," Gilligan told CSNews Online this morning. "We expect to know sometime today whether our proposal made it or not."

If the below-cost measure is dropped from the larger Energy Bill, observers, including Gilligan, agree it will be virtually impossible to win an amendment adding below-cost to the bill.

"If you're in the bill, it takes 50 votes to get you out. It's a lot easier to stay in once you're in than to fight to get your amendment in," said a disappointed Gilligan.

PMAA officials have spent the past month lobbying and educating U.S. senators on the need for a below-cost law to prevent hypermarkets and other high-volume petroleum retailers from selling gasoline for as much as 15 to 20 cents a gallon below street price.

PMAA and its supporters contend that such pricing tactics threaten untold numbers of petroleum marketers, dealers and convenience store operators. Below-cost critics counter that the federal government should not interfere with pricing issues and that protective, anti-predatory pricing federal legislation already exists.

In a letter to PMAA members and distributed yesterday to CSNews Online, Gilligan stated, "PMAA efforts to get federal below cost legislation moving in this session of Congress have hit some stormy seas."

Gilligan notes that his organization had actively work with the staffs of Daschle and fellow Democratic Sens. Jeff Bingaman and Max Cleland, respectively of New Mexico and Georgia. "Unfortunately," Gilligan said in the letter, "last Friday (2/8) one of our members unintentionally told a non-member about PMAA's strategy to get into the Daschle bill. hat conversation resulted in one of our opponents getting tipped off about our strategy."

Gilligan said that as of yesterday, the below-cost language was still in the bill, but that "serious high-level concerns [were] being raised about the language. Needless to say, we have suffered significant damage. The matter is now generating internal controversy, exactly what we did not want."

Should the language be stricken, PMAA will continue to pursue federal legislation, but, as Gilligan noted, "that is a tough mountain to climb."