This week OilSpot spoke with Mr. Dan Gilligan, president of The Petroleum Marketers Association, which is a federation of 44 state and regional trade associations representing approximately 8,000 independent petroleum marketers nationwide.

We presented Mr. Gilligan with several questions, with his insightful answers ranging from regulatory control of the industry to the challenges for PMAA members.

1.      Please explain the goal, or mission of the Petroleum Marketers Association of America?

Mr. Gilligan: 

“The mission of PMAA has narrowed quite a bit in recent years. Originally PMAA was founded as the National Oil Jobbers Council (NOJC) and NOJC had a very broad and comprehensive mission serving as the national trade association of 20,000 petroleum marketers. Like PMAA today, NOJC was structured as a federation of all the petroleum marketing state and regional associations. Over time as the state and regional associations became stronger and offered a wide variety of member services the need for similar services nationally diminished. As a result, in recent years PMAA has narrowed its focus to the one thing state and regional associations need the most and that is federal legislative regulatory representation. In the past year, we have narrowed our mission even more to focus on the 7,000 marketers who comprise the “jobber” class of trade. The jobber class of trade is unique in that it is both a wholesale and retail enterprise. The jobber business is multifaceted and normally involves motor fuels, heating fuels and lubricants. There are many public policy matters that have a distinct impact on jobbers, and that is where we focus our efforts.”

2.      What challenges are facing your members in today’s struggling economy?

Mr. Gilligan:

“In many ways the slow economy has not been the greatest challenge for petroleum marketers. Certainly some of their commercial customers for motor fuels and lubricants have diminished but most marketers have been able to adjust successfully. The greatest recent challenges relate to refiner mergers, loss leader retailing and environmental regulation.”

3.      What would your members target as providing the greatest obstacle for growth?

Mr. Gilligan:

“The term growth is not one that I’ve heard recently. I think most marketers are focusing more on profitability than on growth. Finding new efficiencies and weeding out weak performers seems to be the greater focus. The greatest obstacle to growth is probably uncertainty. With the refiner mergers and consolidation, loss leader retailing and environmental regulation, there is uncertainty in the minds of marketers and that uncertainty translates into very cautious growth objectives.”

4.      Generally, is there too much, or too little regulatory control over the industry?

Mr. Gilligan:

“That is a very interesting question. Certainly, if you interviewed our national board of directors, I would bet that each member believes that there is far too much regulation. However, realistically, the petroleum industry touches the lives of nearly every U.S. citizen therefore, we will always bear a significant political and regulatory burden. The problem with regulation is that it seems to always go to far. A good example is the diesel sulfur rule imposed by the Environment Protection Agency (EPA) beginning 2006. EPA could have achieved tremendous environmental benefit by imposing a 50 ppm sulfur standard but as regulators often do, they simply go too far. EPA adopted a 15 ppm standard that is now going to create a nightmare for everyone in the diesel business. A 15 ppm standard is essentially a “no sulfur” standard and the costs to implement it will be exorbitant. A 50 ppm standard was the best “cost- effective” threshold but common sense never had a chance. Another example is the SPCC (spill control) rule recently adopted by EPA. EPA decided that the term “impracticability” could not include cost. As a result, when an engineer attempts to determine if new loading equipment was impractical, he could not reach that determination using cost as a basis. Is there anything more central to a business decision than cost? These are both examples of regulation having gone too far.

5.      What regulations would PMAA eliminate, modify or add?

Mr. Gilligan:

“Obviously, the diesel sulfur rule and the SPCC rule would be high on our list. We would like to see the hazmat regulatory redundancies between DOT, EPA and OSHA eliminated. We also want Congress and the EPA to devote more Leaking Underground Storage Tank (LUST) resources to state tank agencies to accelerate the ongoing clean up efforts.”

6.   From PMAA’s viewpoint, what is the most promising development in the industry? 

Mr. Gilligan:

“In the oilheat industry clearly, the National Oilheat Research Alliance (NORA) is making a difference rebuilding consumer interest in heating with oil. For those readers that are not aware of NORA, NORA was created by Congress in 2000 and operates on a small tax placed on heating oil. Those funds are used for education and other programs benefiting the oilheat industry and its customers. In the motor fuels arena, the refiner mergers are beginning to show some benefit for the jobber class of trade. All of the major oil companies are changing their view of the jobber class of trade. Jobbers are no longer a secondary outlet but a primary outlet. I have had conversations with each of the marketing vice presidents of the major oil companies and all of them have expressed goals to increase their jobber channel.” 

7.   What is the outlook for PMAA members?

Mr. Gilligan:

“Change, change and more change. Someone once used the quote, “once learning all the answers they change all of the questions,” and that is the plight of jobbers today. Decisions that made sense two years ago may not make sense today and revising those decisions can be difficult. Overall, the jobber class of trade is fundamentally sound and I believe it has a strong future.”

Mr. Gilligan became PMAA's President in August 1998, with significant experience in every aspect of trade association operations including service as a lobbyist at both the state and national level. In his early years of association management Mr. Gilligan edited a weekly newsletter and managed one of the largest trade shows in the United States. He has served as CEO of one state association and two national associations. He has earned his national designation as a Certified Association Executive (CAE), which is granted by the American Society of Association Executives.

Mr. Gilligan supervises the staff and is in charge of the Association's day-to-day operations. In that capacity he is in regular and frequent contact with PMAA's Executive Committee, PMAA Member Association Executives, and with members of the Association's Board of Directors.