The Recession, Most Would Say, Is Already Being Felt : Independent Gas Marketer Feeling Squeeze

Ron Appel is president of Gardena-based United Oil Co., which operates 39 gasoline stations in Southern California. About half of the stations carry the Arco brand; the rest sell the independent United brand. He also sells gasoline wholesale to commercial accounts. For him, talk of a recession only complicates a picture already made difficult by the Persian Gulf crisis. As have most independent marketers who must buy supplies from others, he has been squeezed by high crude oil prices on the one hand and tough competition from major oil company service stations on the other.

“I don’t personally think the demand is going to fall in Southern California (because of a recession). The only thing that will make demand fall is the price itself. There’s too many people that need gasoline.

“When the price goes up, everybody becomes a shopper. People who were buying premium gasoline are buying unleaded.

“(Our commercial customers) are hit hard, very hard. We supply the Los Angeles Unified School District buses, and that’s on a contract, and their costs have gone way up. All your transportation companies, airport service companies, they’re all hit hard. Unfortunately, I don’t see too much relief on the diesel end of the market.

“For me, it’s a bad thing. I’d like to see crude at low levels, gasoline low. . . . We wholesale gasoline, so our exposure is a heck of a lot greater. When we sell gasoline a load for $11,000 rather than $5,000, we still make the same penny-a-gallon profit. . . . Wholesalers are just going out of business left and right.”