Posted on 02/24/2006 9:23:20 AM PST by 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.
(Excerpt) Read more at startribune.com ...
Liberals!.. (Eddie Murphy laugh)...
As the article says:
Defenders of the law say it's critical to protect small and medium-sized stations.In other words, it's designed to be a pro-competition move in an odd sort of way.
They note that unlike large chains, those stations often can't cushion below-cost gasoline with sales of other merchandise.
Still another way to put it is pro-Mom & Pop.
Oh!...I get...Fees and TAXES determine the price of gas...not the "FREE MARKET"....
The great state of Minnestupid. Hope they post the border of this state well and the surrounding states make sure the the Minnestupidians go home before sundown.
[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.]
Communism at work for you.
[They note that unlike large chains, those stations often can't cushion below-cost gasoline with sales of other merchandise.]
(In other words, it's designed to be a pro-competition move in an odd sort of way.)
It's the way that politicians undermine a free economy by making state control buisness laws that never work and will eventually destroy America's properity. Communism is what it is and athiest materialism always leads to poverty near as I can tell.
Gee Squawk 8888, we had a little dust up here in the USA regarding tax on Tea and you are sitting around while they keep the price of beer high! Sounds like a revolution in the making!
Welcome to the "Free Market".
It might be profitable if the gas is a loss leader and most sales are on other items.
Well, this thread is four months old, but I’m glad there is still interest in the topic. The “loss leader” argument was used for years to justify minimum-price laws pertaining to milk sales at convenience stores. I agree that the “loss leader” strategy can be profitable in the short run for a single firm as a means of attracting customers into the store who would otherwise shop elsewhere. However, it’s hard for me to see how this could be a profit-maximizing strategy in the long-run once competing firms react by meeting the lower price to entice their lost customers back into their stores. Since gas prices are required to be posted in almost every state, it’s easy for competitors to observe what prices other stations are charging and to react accordingly.
I’m old enough to remember the gas-price “wars” of the 1950’s in which gasoline retailers engaged in ultimately self-destructive rounds of price reductions in an unsuccessful (in the long run) attempt to gain market share and sell related products and services, like oil changes, tires, and batteries.
Whether or not there SHOULD be price floors is another matter for debate, but it would be easy to see how gas stations with little or no side sales would want them. They would be snuffed out by the big groceries and sundry retailers using gas as a loss leader. Lower their prices to match? Sure, till they run out of money.
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