Minn. Accuses Midwest Oil of Below-Cost Selling

State alleges 163 violations

SAINT PAUL, Minn. -- A Minnesota gas station owner has been accused of selling gasoline for less than the state law allows. State investigators say Midwest Oil of Minnesota stations in Albert Lea, Anoka and Oakdale had 163 violations of the state law that requires stations to charge at least 8 cents more per gallon than they pay for gasoline.

The Shawano, Wis.-based chain's owner, R.C. Samanta Roy, has been ordered to appear on August 5 at an administrative hearing on the alleged violations, reported the Associated Press.

A state [image-nocss] Department of Commerce spokesperson said five other companies over the past year were caught selling gasoline below the state minimum, but all five agreed to stop and to pay fines ranging from $500 to $70,000. They included stations at Wal-Mart stores, several Kwik Trip locations, SuperUSA of Bloomington, Jackson Stop of Elk River and Gas & More of Blaine, according to a report by the Minneapolis Star Tribune.

In April, Roy filed a lawsuit against the Star Tribune for what his lawyer characterized as prejudicial and biased coverage of his business practices, the paper added.

Midwest Oil could be fined more than $1.6 million, added a separate report by the Pioneer Press.

The Commerce Department has ordered the company to stop breaking the minimum price law and to appear at the hearing into the alleged violations. That's a first for the department, which has only enforced the law a handful of times since it was enacted in 2001. In each of those instances, cited above, the owners settled and paid fines ranging from $500 to $70,000, the report said.

Commerce Department spokesperson Bruce Gordon told the Pioneer Press that the agency is investigating 10 similar cases around the state. Any time prices increase, there's more sensitivity to what people are charging at the pump. Competitors are also very sensitive because margins are very thin. Our complaints come from competitors, not consumers, he said.

The allegations leveled against Midwest Oil came about after a lengthy investigation, the report said, citing the Commerce Department, which alleges that its investigators repeatedly bought gasoline below minimum prices at all three stations and that Midwest Oil failed to fully comply with subpoenas requesting documents.

The Commerce Department also alleged that Midwest Oil charged less at the pump than the prices posted on signs at its stations and that the company offered illegal discounts if customers paid inside rather than at the pump, Pioneer Press said.