PMAA to Debate Drilling, Below-Cost Pricing

SCOTTSDALE, Ariz. -- When the Petroleum Marketers Association of America (PMAA) hold its Motor Fuels & Lubes Conference this week, predatory pricing and the nation's energy policy will take center stage.

And what is expected to spark some controversy is an acerbic piece penned by Roger Dreyer, president of the Ohio Petroleum Marketers Association of America, in his organization's bimonthly publication, Ohio Petroleum Marketer.

In pushing for national and state below-cost gasoline legislation, Dreyer encouraged fellow jobbers to paint the debate in patriotic colors, to accuse big box retailers like Wal-Mart and Kroger of being un-American by selling gasoline as loss leaders. The logic is cheap retail prices will spark increased consumption, resulting in even greater dependence on Middle Eastern exports, the money of which could be financing terrorist cells.

While his position on below-cost is likely to win support, it is Dreyer's other point that could spark some contention and healthy debate, marketers say.

In opposition of PMAA's longstanding pro-exploration position, Dreyer suggests that as long as mass merchandisers and supermarkets continue to retail gasoline at below-cost, PMAA should oppose drilling in the pristine Alaskan refuge. "Why should oil marketers support drilling in Arctic National Wildlife Refuge (ANWR) so more product can be sold very wastefully by the big box stores such as Kroger and Wal-Mart?" he questioned in his one-page editorial.

PMAA President Dan Gilligan described Dreyer's call as "sort of dicey."

"PMAA has always been a pro-production organization," he said, adding he had not taken a position on the matter. "All of the sudden there are a number of jobbers like Roger saying the pro-production policy is not going to do anything to help the independent marketer as long as it's being sold by big boxes as a loss leader. It doesn't make sense to sell a finite resource at below-cost to support renewable products inside the store."

The conference will run from Jan. 9-12.