Legislation aims to repeal minimum gas price law

State Sen. Chuck Wiger has re-introduced legislation that would allow stations to sell gasoline at any price. If approved, the legislation would repeal a state law that requires gas stations to charge a minimum of 6 percent or up to 8 cents above wholesale cost.

“We don’t require hardware and grocery stores to sell power tools and apples at artificially inflated prices, and we shouldn’t mandate an 8-cent boost in gas prices,” Wiger said. “My provision would allow the free market to work.”

The legislation was originally introduced as an amendment to the Senate Transportation Policy Bill during the regular session. It passed on a 35 to 30 vote. Now, Wiger (DFL-North St. Paul) is re-introducing it in the Senate, while Rep. Joyce Peppin (R-Rogers) is re-introducing it in the House.

Wiger said he has yet to hear Gov. Tim Pawlenty’s official opinion on the legislation.

The minimum gas price law was enacted in 2001. Wiger, who voted in favor of the law at that time, said there was a general concern that smaller stations would go out of business without enacting such legislation.

“Since we passed it, there are still 200 or 300 hundred fewer stations,” he said. “Now that we’ve seen the evidence, it doesn’t make sense anymore. This law is a built-in profit for the gas stations.”

Local gas station owners disagree.

“Sen. Wiger believes that 6 percent (above wholesale cost) is our profit. It is not,” said Steve Linn, president of The Linn Companies, which operates 15 stations, including a Holiday store on Hadley Avenue in Oakdale.

After a station owner pays 2 cents above wholesale cost for delivery of the gas and an additional 2.5 to 3 percent for credit card processing fees, the price consumers pay for the fuel is nearly equal to what a gas station pays, said Linn, adding that nearly 90 percent of all gas purchases are paid by credit card.

“If we sell at the legal minimum, we are not turning a profit,” he said. “We are only selling at cost. Sen. Wiger does not understand that.”

By allowing stations to sell gas below cost, “you allow bigger companies that are not primarily in the gas business to attract customers to other merchandise they are selling for profit,” Linn said. “Independent owners would suffer.”

Corey Boland, who manages the Freedom gas station on Century Avenue in Oakdale, echoed Linn’s comments.

“All the mega centers would drive the smaller convenience centers out of business,” Boland said. “This company would go out of business, and then look at all the jobs that would be lost.”

Wiger said his proposed legislation would help to rein in skyrocketing gas prices. “It’s become a real hardship for many Minnesotans, and whatever our means, none of us likes to pay more than we need to for the expenses we face on a regular basis,” he said.

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