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So Long, 6%?

La. Senate votes to let stations sell at cost; bill that sidelines Odom awaits Blanco's pen

BATON ROUGE, La. -- The Louisiana Senate voted 33 to 5 Tuesday for final passage of a bill to let gas stations sell fuel at cost rather than a 6% minimum markup required under current law, said The Times Picayune.

The bill also assigns regulatory authority to the state attorney general and local district attorneys, the report said, intentionally removing Agriculture Commissioner Bob Odom from his recently self-appointed role as the state's gas price policeman.House Bill 763 by State Representative T. Taylor Townsend (D) would become law with Governor [image-nocss] Kathleen Blanco's signature.

The major opponents to the bill wanted a measure that would have eliminated any sort of regulation or minimum price threshold for gas stations, but an amendment to do that by State Senators James David Cain, (R) was defeated 24 to 13.

The bill changes the requirements on motor vehicle fuel sales currently contained in the state's 65-year-old unfair sales law, which requires retailers of all kinds to mark up their prices 6%. The law is meant to prevent predatory pricing that could run competition out of business and create a monopoly. Townsend's proposal would not allow gasoline sales below a station's cost of acquiring the fuel if the intent is predatory pricing. It is supported by the Louisiana Oil Marketers & Convenience Store Association, representing about 2,700 stores and 110 gasoline wholesalers in the state.

The oil marketers have long supported the 6% markup rule and became concerned several years ago when Wal-Mart stores in Louisiana started adding stations owned and operated by Murphy Oil. As a manufacturer and retailer in Louisiana, Murphy Oil has some exclusions from the existing markup law.

As reported in CSP Daily News, the gasoline price issue became a political flashpoint this year when Odom sought to assert himself as the gasoline price regulator, just as consumers were paying record prices at the pump.

In a significant concession, the oil marketers group backed off their stand to keep the markup and backed Townsend's bill to set the legal price at cost, except for special promotions and some other special exceptions.

Murphy Oil supported the Cain amendment and a proposal similar to Cain's in the House that unsuccessfully competed against Townsend's bill.

In Tuesday's Senate floor debate, both sides tried to paint their proposals as the most friendly to consumers. Let the free market go like we go, Cain said. Louisiana citizens don't need to be protected from low gas prices.

But Sen. Joel Chaisson II (D, who carried the bill for Townsend in the Senate, said his measure represented the best chance for gasoline price legislation this session.

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