Midwest Oil fined for selling gas too cheaply

Star Tribune ^ | February 24, 2006 | Tom Ford,

[george76]

The state imposed a $140,000 penalty for what it called "willful, continuing, and egregious" violations of the price law...

The Minnesota Commerce Department on Thursday announced plans to fine a gas station chain $140,000 for repeatedly selling gas below the state's legal minimum price.

The fine against Midwest Oil of Minnesota is twice as large as any imposed on a company since 2001, when the state established a formula based on wholesale prices, fees and taxes to determine a daily floor for gas prices.

Kevin Murphy, deputy commissioner of the department, called the violations "willful, continuing, and egregious and warrant a substantial penalty."

The company has 30 days to contest the fine by requesting a hearing.

In previous cases, companies were fined anywhere from $500 to $70,000 for selling gas too cheaply.

Gov. Tim Pawlenty and several Minnesota legislators have urged a repeal of the state's minimum price rules.

Critics have argued that it ends up costing most customers an extra dollar or more to fill up, without adding to tax revenues.

[DeFault User]

If you sell for too high of price you're gouging, if you sell for too low of price you're unfairly competing, and if you sell for the same price as your competitors you're colluding.

That's about it. I don't know about your area but down here in the Carolinas, Coke and Pepsi have solved that problem. They take turns having sales, one week it's Pepsi, the next it's Coke. Each week one bribes the grocery store chain for product placement and has a sale. Next week, the other does it. If you can drink either one or neither, you're fine.

Since the situation changes every week and at no time is one priced the same as the other, problem solved.

[Onelifetogive]

As a side issue, what possible rationalization can there be for a state government setting the minimum price for anything?

Like labor?

[sgtbono2002]

I can buy Coke or Pepsi cheaper when they have their sales at Walmarts , than I can buy it directly off the truck. I was told by the driver that they buy theirs at Walmart or wherever the sale is because its cheaper than the employee price. ./

[riverdawg]

"The purpose is probably to keep someone from just dumping on the market below costs just to take out competition."

... despite the fact that such a pricing strategy can never be profitable for the "dumping" firm!

[Tolerance Sucks Rocks]

Maryland has a law like that, too. A great bonus for rent-seekers.

[Past Your Eyes]

Imagine what they would get for punishment if they had given it away. Probably execution.

[traviskicks]

good find

[george76]

Thank you.

[Rakkasan1]

Gubmint Goldilocks price: it's "juuuuust right"

[PsyOp]

...so the state can get more bang for it's 2% gas tax? Or is it part of some anti-competition thingy?

Probably both.

[The Old Hoosier]

It's anti-competition -- the state collects by the gallon.

[conservative blonde]

Me too.

[lowbridge]

bump

[lgjhn]

Those laws are everywhere.... Its socialism at its worst...

[grey_whiskers]

If you sell for too high of price you're gouging, if you sell for too low of price you're unfairly competing, and if you sell for the same price as your competitors you're colluding.

Can I use that phrase for a Conservative T-shirt? (It won't fit on a bumper sticker!)

[grey_whiskers]

-- (Taxes 'R Us ... State of Minn, the Land of Milk'em, Bilk'em and Rob)

Used to live in Minnesota. Is Roger Moe still in the State Senate?

Full Disclosure: It was a real shame Rudy Boschwitz lost to the now-deceased Wellstone. I liked the free-refill tank truck of milk at the State Fair to eat with the cookies.

Second Disclosure: The Land of Milk'em, Bilk-em and Rob is doubtless represented by the Law Firm of Dewey, Cheathem, and Howe!

Cheers!

[moehoward]

Correct. Some of the ...ahem.... big box supercenters have gotten into similar trouble for selling gas under the going rate to draw customers to stores.

[GretchenM]

Gov. Tim Pawlenty and several Minnesota legislators have urged a repeal of the state's minimum price rules.

Time to quit urgin' and start legislatin'.

[KarlInOhio]

Can I use that phrase for a Conservative T-shirt? (It won't fit on a bumper sticker!)

Use it if you want to. I paraphrased it from Ayn Rand, so you might want to look for the original. Sorry, I don't know which book it was from.