FOR YOUR INFORMATION................March 14, 1989



     The Federal Trade Commission staff has said that a bill to
regulate gasoline prices in Montana "is anticompetitive and
that, if the bill is enacted, Montana consumers and visitors
could pay higher prices for gasoline."

     The staff comments were requested by State Senator Gene
Thayer, Chairman of the Montana Senate Business and Industry
Committee.  The bill would prescribe minimum price levels and
prohibit price discrimination.

     According to the FTC staff, the bill's premise "is that
independent and small retailers and wholesalers are being vic-
timized by 'subsidized pricing, which is inherently unfair and
destructive.'  Several studies of competition in gasoline
marketing in the United States since 1981 have concluded that
gasoline dealers and distributors have not been and are not
likely to become targets of anticompetitive practices by their
suppliers."

     The staff said that the bill "is likely to have several
adverse consequences for consumers.  Because of the uniform
mark-up provision of the bill, retailers might be unable to
operate discount outlets, which trade a smaller profit margin for
larger volume.  In addition, short term price discounts designed
to attract new customers would be deterred.  The result is likely
to be rigid, uniformly higher, retail gasoline prices within
Montana."

     The comments are the views of the staff of the Bureau of
Competition.  They are not necessarily those of the Commission
itself or any individual Commissioner.

     Copies of the comments are available from the FTC's Public
Reference Branch, Room 130, 6th St. and Pennsylvania Ave. N.W.
Washington, D.C. 20580; 202-326-2222; TTY 202-326-2502.

                             # # # 

MEDIA CONTACT:      Susan Ticknor, Office of Public Affairs, 
                    202-326-2181

STAFF CONTACT:      Ronald B. Rowe, Bureau of Competition,
                    202-326-2610

(MontGas)