Evening star. [volume] (Washington, D.C.) 1854-1972, 1951-05-27

to meet any intense competition
they might encounter.
Following suit, Shell and So
cony- Vacuum Oil Co.'S. also clipped
regular gas prices l cent and
premium gas u cent. bringing
cuts of a cent or two at retail
stations and fears of a general
price war here.
What steps other major DILL
companies take this week may|
determine whether the local
market will stabilize again. The
majors are expected to meet the
pattern set by Sun.
Horace Walker. executive secre-
tary of the Retail Gasoline
Dealers, said there was no logic toll
Suns 1-cent wholesale reduction
here. because there has not been
a price war within $50 miles of
Washington since 1910. He also
commended that Suns gallonage
Isales have been steadily rising.
Sees Attempt at Leadership.
Mr.. Walker said Sun obviously
was attempting to take the price
leadership in the Washington mar
|ket, a leadership which ESQ
Standard oil had long dominated.
He said the first step was TAKEN
IA year ago when Sun dropped its
wholesale price IA cents, bringing
similar cuts from ESQ and others.
The danger of a price war was
seen in the fact that one of the
other major companies may drop
its wholesale price only u cent,
thus leaving it to the dealer toll
make up the other half cent if he
wishes to meet competitive prices
The dissatisfied dealer might sayl
ito heck with it" and cut a cent
under his competitor, thus touch
ing off war, Mr.. Walker said.
However, Washington dealersI
were determined to avoid warl
such as cut prices 7 cents in New
ark, N. j., and cost the industry
$26 million. Mr.. Walker said.
When the price-warring beginsl
in a refinery, it may have its start
when the refinery is running all
out to build up summer stocks,
and trying hard to sell the surplus.
The company might sell tanker
at the regular price. then have
the deal fall through.
Hoping to salvage something
and meet crew expenses, the pro-
Queer might sell at a 2 or 3 cent
loss. When the tanker reaches
Philadelphia harbor, an effort is |
made to sell the gas at regular
prices. That failing, it will be
sold to a dealer at a cut price, and
that dealer then has something
with which to undersell his COM
petitor.
Carrying the hypothetical case
to conclusion, competition sets
In at a rugged rate. Rater than
to see the undercut dealer lose his
business, his oil company supplier
subsidies him.
Dealer Feels 1t Worst
Thus in most price wars, whenl
the squeeze is put on a dealer,
the oil companies come to his
rescue, at least to a point. If
the throat-cutting goes too far,
it usually Is the dealer who gets
roughed up the most.
While some Shell retailers
trimmed their prices one or two
cents here yesterday. others de-
cided to maintain present prices
rates are exhausted. Mobilgas
dealers said they would de-
termine this week whether toI
lower prices.
Price wars have been flaring
in several Seaboard cities. mi
addition to the Newark war, Just
ended, prices were cut / cents att
Greensboro. N. C. Less acute
skirmishes were reported as close
as Norfolk. Richmond and Roa-
noke.
Washington is not likely to be
touched by one common cause
OF Seaboard wars. These are in
stigated by the cut-rate sale of
third grade, or unbranded, gaso-
line which is handled by seaports
like New York, Philadelphia and
Baltimore, but has little sale
Z q Ina IL L.. i