Company accused of selling gas at illegal price

Vehicle owners continue to pour into Circle-C Convenience Center on Hadley Avenue in Oakdale to fill up their gas tanks.

Why wouldn’t they?

With many stations selling gas for approximately $2.09 per gallon on June 28, Circle-C was selling it for $2.01. The problem, according to the Minnesota Department of Commerce, is that the station has been violating the state’s minimum gas price law.

On June 27, the Commerce Department ordered the company to stop selling gas below the state’s legal minimum price.

The Commerce Department accused Midwest Oil of Minnesota of breaking the minimum price law on at least 24 occasions in Oakdale and a combined 139 times at stations it operates in Anoka and Albert Lea in recent months. Each violation is punishable by up to a $10,000 civil fine, meaning the company could potentially be fined more than $1.6 million.

Midwest Oil was also ordered by the Commerce Department to appear at an administrative hearing.

“It’s a chance for both parties to present their side of the matter,” Commerce Department spokesman Bruce Gordon said. “After hearing all the testimony and being presented with the evidence, the administrative law judge would issue a conclusion of law and a recommendation back to the commissioner. Action, if warranted, could include civil penalties.”

Midwest Oil representatives did not return calls seeking comment on this story.

Minnesota law requires gas stations to sell gasoline at a price 6 percent (up to 8 cents per gallon) higher than wholesale prices.

Gordon said on the rare occasion that a gas station is not in compliance with state law, the station will typically correct the problem after a warning letter is issued from the Commerce Department. That has not been the case with Midwest Oil, he said.

The Commerce Department alleges the company has failed to produce requested or subpoenaed documents, provided incomplete responses and failed to meet department deadlines.

“They have had a number of warnings and there has been a lot of requests for information and contact,” Gordon said. “So there has been plenty of opportunity to be compliant with state law.”

Since the law was enacted in 2001, the Commerce Department has leveled civil penalties ranging from $500 to $70,000 to five companies for selling gas below the legal minimum price.

For the Holiday gas station across the street from Circle-C Convenience Center, business has continued to remain steady despite the competition.

“We get a lot of overflow because (Circle-C) is so incredibly busy,” said Steve Linn, co-owner of Oakdale’s Holiday station. “People are driving to this area from miles away.”

Linn said he is in a no-win situation when it comes to trying to compete with Circle-C Convenience Center.

“You can either match their price and then be illegal and lose money on every customer that comes into your facility, or you can sell at a legal price but do less business and still be at a lesser margin than the industry as a whole,” Linn said. “Neither scenario is good.”

Comment Here