SDG&E; paid an oil dealer $3 million to settle a suit.

The settlement with bankrupt United Petroleum Distributors of Houston and its president, Edward J. Fourti calls for both sides to drop their lawsuits. San Diego Gas & Electric had alleged that United defrauded it out of $31.2 million in fuel oil as part of an oil-storage agreement in 1978, while Fourti countersued on charges of breach of contract and false representation. SDG&E; said it already has written off $30.6 million in probable losses from the deal.