Gas War Casualty

Britain trails only the U.S. and Canada as a gasoline consumer, a fact that should delight its 13 major oil companies. It does not. In trying to set up the new service stations they need in order to compete, the companies are running into soaring land prices, a tangle of zoning laws and the threat of government control over the number of stations they can own. Dozens of small independents have sprung up to plague the majors, buying gas cheaply from Continental refineries and then undercutting prices. Britain has been witnessing a cutthroat gas war for months, and last week it chalked up the first major casualty. Italy's state-owned ENI oil combine sold to British Esso its chain of 73 British stations and 40 new sites.

The British branch of ENI, called AGIP (Great Britain) Ltd., was launched four years ago by the late Enrico Mattei, ENI's aggressive boss. Alert to the British potential and anxious to bite into the home market of British oil companies (which then controlled 25% of Italian sales), Mattei opened the biggest, neatest stations that Britain had yet seen. He intended to add a refinery, but his deal to build one fell through. AGIP ran into increasing competition, began to lose money. ENI Boss Eugenio Cefis, who took over after Mattei died in an airplane crash three years ago, decided to "redimension" the over-extended oil empire.

A feeler from Cefis was snapped up by Esso, which ranks third in Britain and was delighted to add AGIP to its 8,000-station chain. Esso agreed to pay $11 million for the chain, a sum that gave ENI a modest overall profit on its investment and last week earned Cefis the compliments of Italian businessmen for consummating un buonissimo affare. Besides removing one of Esso's competitors and restoring the chain to private enterprise, the deal also gives Esso precious locations that it can utilize in its battle with leading British Petroleum and Shell.

The gas war is still far from over. Independent gas suppliers are growing increasingly aggressive; some of them push their products by using beautiful girls as station-to-station salesmen. "Pirate tankers"--large tanker trucks with two full-sized petrol pumps attached to the rear--now tour main roads to sell motorists cut-rate gas as they speed to work or sporting events. Roadside operators have also begun to buy "distress lots" of ungraded gas and sell it cheaply under such names as "Zoom" and "Whoosh." Some of it is only 60 octane, hardly enough to run a sewing machine--but the British motorist seems unable to resist a bargain.

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