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Wisconsin State Demands that Gas Station Stops Discounting Gas

[Editor's Note: The first story went out from Associated Press on May 9. It created such a furious consumer backlash against the state of Wisconsin's Consumer "Protection" department, that they had to backpeddle today (May 11) and recast their demand as a "friendly reminder", even getting the gas station owner to deny he was threatened by the Wisconsin Dept with a lawsuit if he didn't comply. Is there any doubt that the gas station owner originated the story with the press and told the reporter that he was being threatened with a lawsuit? Who's kidding who? This guy was leaned on and now he's playing possum...Ken]

http://educate-yourself.org/cn/wisconsindemandsgasincrease09may07.shtml
May 9, 2007

http://news.yahoo.com/s/ap/20070509/ap_on_fe_st/odd_cheap_gas_7

Original Title:
Gas station owner told to raise prices

Wed May 9, 2007

Gas NozzleMERRILL, Wis. - A service station that offered discounted gas to senior citizens and people supporting youth sports has been ordered by the state to raise its prices.

Center City BP owner Raj Bhandari has been offering senior citizens a 2 cent per gallon price break and discount cards that let sports boosters pay 3 cents less per gallon.

But the state Department of Agriculture, Trade and Consumer Protection says those deals violate Wisconsin's Unfair Sales Act, which requires stations to sell gas for about 9.2 percent more than the wholesale price.

Bhandari said he received a letter from the state auditor last month saying the state would sue him if he did not raise his prices. The state could penalize him for each discounted gallon he sold, with the fine determined by a judge.

Bhandari, who bought the station a year ago, said he worries customers will think he stopped the discounts because he wants to make more money. About 10 percent of his customers had used the discount cards.

Dale Van Camp said he bought a $50 card to support the local youth hockey program. It would have saved him about $100 per year on gas, he said.
---------------------------------

Division of Trade and Consumer Protection: 608-224-4949

Wisconsin Department of Agriculture, Trade & Consumer Protection, PO Box 8911, Madison, WI 53708-8911

***

State: Gas station owner told only that he must follow law

http://www.wausaudailyherald.com/apps/pbcs.dll/article?AID=200770511074

Posted May 11, 2007

State: Gas station owner told only that he must follow law

The Associated Press

MERRILL - The state did not tell a gas station owner that he must raise his prices but did tell him he could not offer discounts that violate the state's law ensuring fair competition, said the official who oversees enforcement of the law.

Raj Bhandari, owner of Center City BP in Merrill, offered a 2 cent per gallon price break for senior citizens and a 3 cent savings for sports boosters with a discount card.

But Bhandari, 36, said he stopped offering the deals after he received a letter from the state Department of Agriculture, Trade and Consumer Protection telling him his discounts might violate the state Unfair Sales Act.

While a number of states have laws preventing service station owners from selling gas at below cost, Wisconsin's act requires wholesalers to mark up gas 3 percent and retailers to add another 6 percent. That means drivers should pay at least 9 percent over cost.

The 1930s-era law was intended to prevent gas stations from driving each other out of business, and it includes an exception that allows them to drop their prices to match a competitor's.

Gov. Jim Doyle has ordered the state not to enforce the law as it applies to sales of ethanol blends. In addition, a state court has determined that some deals such as those offered by credit card companies are OK.

Janet Jenkins, administrator of the DATCP's Division of Trade and Consumer Protection, said it never determined Bhandari violated the law but wanted to let him know a competitor complained and he needed to make sure he wasn't doing anything wrong.

Gas stations can offer discounts as long as they don't drop the price below the minimum or undercut their competitors, Jenkins said.

"Offering a discount is not illegal per se," she said. "Offering a discount is perfectly fine unless the discount violates the law."

Bhandari said he called the DATCP after he received the April 18 letter and spoke to an auditor. He concluded his discounts did not meet the state's requirements.

He also learned the law allows a competitor to sue him to recoup its losses and sets a penalty of as much as $2,000 per day for up to six months.

Bhandari said he never said the state would sue him, as has been reported.

"The state has never told me they will sue me," he said. "It was a very friendly reminder from the state, it was not anything harsher than that."

The DATCP receives several hundred complaints each year about gas stations violating the Unfair Sales Act, mostly from other service station owners, Jenkins said. The complaints increase with gas prices because retailers struggle to stay competitive even as their costs go up.

The average price for unleaded gas in Wisconsin was $3.16 per gallon on Thursday, according to AAA. Jenkins said she doubted any service stations were charging the minimum mark up.

"Everybody is way below that, and the reason is they are meeting each other's prices," she said.

 

 



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