MADISON, Wis. -- Wisconsin's minimum markup law for gasoline will stay in place after a legislative committee refused to repeal it Tuesday, reported the Associated Press. The decision means gas stations can keep charging at least 6% more for gasoline than what they paid for it.
Even if the bill had passed, the measure would not have reduced pump prices much, said Mark Skidmore, a University of Wisconsin-Whitewater economics professor who has studied gasoline markup laws nationwide.
We're talking about a penny or two either way, [image-nocss] Skidmore said.
The 1930s-era law requires wholesalers to charge stations at least 3% more than they paid. Gas stations in turn must tack on at least 6% more at the pumps. The law's supporters say it prevents large retailers from underselling smaller gas stations and driving them out of business.
When gasoline prices climbed after Hurricane Katrina, lawmakers started searching for ways to cut prices.
State Senator David Zien (R), chairman of the state Senate Judiciary, Corrections & Privacy Committee, introduced the bill to do away with the markup law. But the committee voted 3 to 2 not to forward the bill to the full Senate. Zien said doing away with the law would save motorists 2 to 5 cents per gallon.
Committee member State Sen. Fred Risser (D), who voted against the bill, said it would kill independent stations. In the long run, consumers would be paying more, he said. The price of gasoline isn't due to the markup law. It's due to the oil cartels.
Skidmore said large retailers would undoubtedly raise their prices after they have undersold the competition and driven them out of business, he said. In the absence of these [markup] laws, there are fewer retailers in the market place, Skidmore said.
Bob Bartlett, president of the Wisconsin Petroleum Marketers & Convenience Store Association, said repealing the law would drive independent stations under, and agreed that the minimum markup is not the reason gasoline prices are high. This wouldn't have helped, said Bartlett, whose group lobbied against the bill.
Also Tuesday, State Representative Steve Nass (R) gave up his push to call an extraordinary session to decide whether to eliminate the state's 29.9-cent a gallon gasoline tax for a month. Only 12 legislators signed Nass' petition calling for the session. Nass said that plans to introduce the month-long hiatus on his own as a bill next week when the Legislature reconvenes.
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