State gas prices

Group says repealing state markup law could ease gas prices

MADISON - A coalition that includes Wal-Mart, the Wisconsin Counties Association and the American Automobile Association says you could save a few bucks at the gas pump if the state would repeal a law intended to promote competition and, protect small gas station owners.

Repealing the minimum markup law may sound like welcome relief to Wisconsin consumers, who still face nearrecord high gasoline prices. The average price for a gallon of gas in the state was reported as $2.05 on Thursday, dipping from a high of about $2.09 a couple weeks ago, said Michael Bie, a spokesman for AAA Wisconsin.

But a trade association representing independent gas station owners says larger companies would force smaller companies out of business by selling gasoline below cost if the law was repealed. And then, they'd jack up prices, said Bob Bartlett, president of the Petroleum Marketers Association of Wisconsin/Wisconsin Association of Convenience Stores, which represents about 500 businesses in the state.

Should state government be allowed to dictate the minimum price of gasoline sold in Wisconsin?

The law requires wholesalers to mark up their prices by at least 3 percent and retailers by at least 6 percent, which adds 1.3 cents to 1.8 cents per gallon, said Kennan Wood, a spokesman for the Coalition for Lower Gas Prices. As a result, Wisconsin consumers shell out about an extra $40 million a year for gasoline, Wood said.

The coalition, which also includes trucking companies, the Wisconsin Builders Association and Murphy Oil, will push for a one-year suspension of the law during the legislative session that starts in January, Wood said. The group has tried unsuccessfully to repeal the law, but imposing a one-year time limit may improve its chances, Wood said. The group also wants the state Department of Administration to study the impact of the law on consumers and the marketplace, Wood said.

The law means bigger profits for larger companies, which might bring in an extra $16,000 to $17,000 per station each year, compared to about $2,000 a year for small station owners, Wood said.

The state Petroleum Marketers Association supports the law, which promotes competition and helps keep prices down on a long-term basis, however, Bartlett said. Consumers may see a short-term price drop if the law is repealed, but the change eventually would result in predatory pricing by conglomerates, Bartlett said.

Gas prices in 13 states that have banned selling gasoline below cost during the past 20 years have experienced lower gas prices within five years, according to Mark Skidmore, an economics professor at UW-Whitewater, who completed a study on the topic last month. The number of gasoline retailers with five or more employees also increased between 4.5 percent to 7.4 percent in those states, suggesting the laws spur competition, the study found.