I graduated from the Union Oil Marketing Academy in 1968 and operated a Union Oil service station as a dealer during the infamous gas war years. It was a time of tumult and change for the service station industry. At age 23 I was Union Oils youngest dealer. I quickly discovered that a dealer is a device used by the major oil companies to absorb the cost of operating their service stations. We paid for everything. They even charged us a monthly rental fee for the lighted oil company logo. We pounded the pavement and paid the bills while they raked in the long green. Our average profit margin was only 6 cents per gallon, lower during the gas war years.
The real war was between the service station dealers and the oil companies. Dealers were outraged when drug stores, discount chains and grocery stores began selling our branded products at discount prices. You could buy a quart of Union 76 Super Royal Triton motor oil at White Front cheaper than we could buy it from Union Oil. We vehemently protested at dealer meetings, but to no avail. The majors wanted their market share of sales and were willing to get it at the dealers expense.
We fought back against the drug and grocery stores by stocking our service stations with panty hose, twinkies, cartons of cigarettes, coffee and donuts, T-shirts and cases of off brand sodas at discount prices. Some dealers obtained liquor licenses and began selling beer and wine. Little did we realize that our protest created a major marketing trend, because that’s what the major oil companies are doing today, selling gasoline, beer and twinkies.
To fight back against the oil companies we began buying and selling non oil company T.B.A (Tires, Batteries and Accessories) at cheaper prices to stay competitive. We sold SunPower batteries and a third of the price of a branded 76 Union Four Star battery. We bought RayLube reclaimed motor oil for .10 cents a quart. This didn’t set well with the oil companies, and they claimed it violated our lease agreements. They were spending huge amounts of money to promote their products and we weren’t selling them. They also spent a lot of time and money training us to perform automotive services and we weren’t using their products.
Unknown to us, the majors were planning to get completely out of automotive services and branded TBA. The new game plan was to sell gasoline only at the highest possible profit margin. This meant marketing self serve gasoline at full service prices.
The biggest bugaboo in the game plan were the minor independent refineries such as the Powerine Oil Company. Powerine refined and blended a good grade of gasoline, required the motoring public to pump it themselves, and sold it at rock bottom prices. We were selling at 33.9 and 36.9 while the minors were selling at 21.9 and 23.9 cents per gallon, or less. Powerine was geared for high volume sales with some of their stations having twenty or more pumps. No services were provided, and several runners collected the money at the pump. The majors were desperate for this type of operation.
For the majors to market self serve gasoline at full serve prices the small independents had to go. The majors developed a marketing farce called the “GAS WAR” to put the independents out of business. The majors began selling full service gasoline for 23.9/26.9 cents per gallon. Why would you go to a self serve when you could have your gasoline delivered by a well dressed attendant, have your front and rear windows washed, have your tires, battery and oil checked, use the restroom, ask directions, and drive away with a free road map?
The motoring public was in heaven, but little did they realize that the cheap full service gasoline would motor them to the end of an American icon and into a reduced standard of living. The gas wars would usher in the demise of the neighborhood service station.
Union Oil Company of California, now UNOCAL, bought up the small independent Harbor Oil chain and shut them down. Remember “Harbie” the harbor seal? Atlantic Richfield, now ARCO, bought up the Rocket stations and shut them down, and on it went. Powerine died on the vine.
The majors were now free to market self serve gasoline at full serve prices without competition from those pesky independents. As leases expired the service stations were tore down and sold for scrap. Many were transformed into Real Estate offices. The fabulous era of the Great American Service Station was over.
The motoring public would be forced to pump their own gas, pay for self serve air and water, wash their own windshield, ask directions from people who couldn’t speak English, and worse of all, have to stop at a fast food restaurant to use the rest room.
Television evangelist Pat Robertson bought the old Powerine refinery and much to his chagrin discovered that financing to bring the old refinery back on line was blocked by the influence of a major oil company. The majors will do whatever is necessary to stifle competition. When was the last time you witnessed a Gas War? How about relaxing regulations and letting the Mom and Pop oil companies back in the game? Will market pressures allow Powerine and others to rise from the ashes and once again create much needed price competition? Could this bring back the Great American Service Station? We can only hope.
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