Tuesday, June 28, 2005
The state Commerce Department is accusing Midwest Oil of Minnesota of more than 160 violations of a state law that requires stations to charge at least 8 cents more per gallon than they pay. Midwest Oil faces a potential fine of up to $1.6 million.The law, passed in 2001, has typically not been enforced and when it has the fines were much smaller than the one proposed. But Commerce is cracking down in an attempt to protect competitors, they admit.
...A Minnesota law bars retailers from selling gasoline below cost. That amounts to at least 8 cents above the total of wholesale prices, plus taxes and fees. For instance, [MN Dept. of] Commerce said the minimum price on March 25 was $2.05 per gallon, but Commerce said it paid $1.96 at Midwest Oil's Anoka station. Two days later, with the minimum still at $2.05 a gallon, Commerce said it paid $1.98.
Commerce also alleged that Midwest Oil charged less at the pump than the prices posted on its signs and that the company offered illegal discounts if customers paid inside rather than at the pump.
"Any time prices increase there's more sensitivity to what people are charging at the pump. Competitors are also very sensitive because margins are very thin. Our complaints come from competitors, not consumers." -- spokesman Bruce Gordon (the old WJON Bruce Gordon?)So even if some guys are taking advantage of futures markets to smooth price swings, they can't make use of the savings to pass on to customers. A similar law in Maryland is preventing Walter Williams from getting a cup of free coffee.
H/T: Policy Guy.