Gasoline price expected to rise as discount fails

Motorists may pay 6 cents a gallon more for gasoline because of failure of a discount plan for distributors, petroleum industry analyst Dan Lundberg said. The oil industry may have to raise pump prices to as high as $1.40 a gallon from the current nationawide average of $1.34 a gallon, he said.

The so-called rebates were discounts given to dealers by refiners to increase consumption. For example, Texaco offered its dealers a discount of 4 cents on every gallon of gasoline sold that exceeded 80 percent of what dealers had moved in the same month of the previous year. But because all oil companies used the rebate system and gasoline deliveries were lower than year-ago levels, no one benefited, he said.