View Full Version : Breakin the Law.......lol

05-09-2007, 06:08 AM
Gas Station Owner Told to Raise Prices
By Associated Press
Tue May 8, 11:26 PM
MERRILL, 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 are too good: They 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 in late April 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 in May 2006, 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 of Merrill 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.

05-09-2007, 06:44 AM
That's pretty common in that business. Some grocery store chains got in simular trouble in some states. Where if you buy so much worth of groceries they discount your gasoline. It's OK in Az (like at the Safeway I buy my gas at in Fort Mohave), but other states have a problem with it because of the limiting how little profit a gas station can make. I think there's an issue in Colorado like this.
I don't get it personally......certainly doesn't look like the laws are there to help the consumer in this case.

Havasu Hangin'
05-09-2007, 07:04 AM
I don't get it personally......certainly doesn't look like the laws are there to help the consumer in this case.
The problem is with the FTC. The FTC let the oil industry consolidate over the past 20 years (or so), and now there are only a handful of gas wholesalers.
The wholesalers soon figured out that if they got into the retail business, they could make even more money. Through the 90's, there was a shift from franchisees to corporate-owned stations. How they did this was simple- open a station nearby (in some cases across the street) and sell the same gas at a loss to put the franchisee out of business. Since the oil companies were making money on the wholesale sales, they could continue to drive franchisees out of the market with little financial impact.
Ever wonder how the retail price of gas can jump on a news story? Since the wholesale price hasn't had time to adjust, and acquisition price of the gas in the tanks at the station hasn't changed...it means the oil companies are now controling the retail price- it's no longer a free market because the FTC let them have such a large market share.
IMHO, the state laws on margin are just a band-aid on the big wound the FTC opened up by allowing a handful of oil companies control both the retail and wholesale market.
I guess in the long-run, the state laws are there to protect the consumer. God help us if the oil companies grab 100% market share.