The Independent Petroleum Association of America is launching a new gas discount program in California

California’s gas-car phaseout brings turmoil to mom-and-pop gas stations as competition heats up

The old gas pump is gone, but another is on the way.

Gas stations with underground oil and gas storage tanks are springing up across the state, where they will offer more than the convenience and price savings of fuel depots — but also a new level of competition.

On Aug. 1, California regulators approved plans from the Independent Petroleum Marketers Association of America (IPMA), a trade group representing the state’s small independent pumps, to offer discounts on all gasoline for sale, including in-station purchases. The industry group is expected to buy new gas pumps, a fleet of which will be placed in gas stations throughout the state. The IPMA, which is based in Oklahoma but reports to California regulators, will sell discounted fuel, and will have the choice of a different discount or to sell its fuel at a higher-than-average price.

Considered one of the largest lobbying groups in the country, the IPMA is also facing political storms, including a possible recall effort of its leader, Oklahoma Sen. Tom Coburn. Coburn has called the plan to offer gas discounts by the IPMA “socialistic” and “a very bad idea.”

“With less competition, they just won’t be able to do it,” says Andrew Moylan, energy analyst for the Institute for Energy Research in Washington, D.C. “They won’t be able to offer the same discounts.”

The new prices will be announced in a national television ad buy on Sept. 8.

The plan has some supporters. “We don’t want to stop at one fuel, because we want our prices to remain the same,” says David Jones, a spokesman for the Independent Petroleum Association of America. In fact, the group is hoping to offer discounts for other alternative fuels, he says.

The program is meant to address what the industry calls “the need for price transparency in California.”

For many years, gas stations have used price-tracking systems that use the average of a few nearby stations as a baseline, based on gasoline sales data provided by the California Energy Commission. The commission’s data is collected by law, and is used to enforce California’s greenhouse

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