SAINT PAUL, Minn. -- A Minnesota lawmaker wants to repeal a state law that she believes is prompting higher retail gasoline prices. State Representative Joyce Peppin (R) argues that a minimum gas pricing law thwarts competition and is not necessary because retailers are already protected against predatory pricing, reported The Star News.
We don't regulate how much a company charges for a hammer or an apple, said Peppin. I am trying to be a capitalist.
The 2001 minimum pricing law requires gas stations to sell their gas at 6%, [image-nocss] or up to 8 cents, higher than the price they paid wholesalers for it, said the report.
The Federal Trade Commission (FTC) has backed assertions that minimum gas pricing could hurt consumers.
In an October 2003 opinion to a Wisconsin lawmaker, the FTC opined that minimum gas pricing most likely deters pro-competitive pricing by preventing more efficient retailers to charge lower prices for their gasoline, the report said. Wisconsin's minimum pricing for gas is 9.18%, it added.
But Lance Klatt, executive director of the Minnesota Service Station Association, told the newspaper that repealing minimum pricing on gasoline is a horrible idea. The law protects smaller, independently owned stations from having the big boys cut-rate their gas prices and drive the smaller, independent stations out of the business, said Klatt.
Rather than curbing competition, minimum gas pricing protects it, he said.
In 2001, when the minimum pricing law went into effect, gas prices in Minnesota were about $1.80 a gallon, said Klatt. Gas prices are now about 25 cents, 30 cents more, he said, according to the paper.
That's not a big jump in four or five years, he said.
The minimum gas pricing repeal saw success in the Minnesota Senate during the regular session, with State Senator Chuck Wiger (DFL) successfully amending the provision onto the transportation bill. Peppin has seen less success in the House, the report said. She proposed to introduce the legislation during the special session.
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