MERRILL, Wis. -- A gas station operator who offers discounted gasoline to senior citizens and people supporting youth sports last week claimed that the state of Wisconsin had ordered him to raise his prices.
The plight of Raj Bhandari, owner of Center City BP in Merrill, Wis., garnered considerable media coverage; however, Janet Jenkins, administrator of the Division of Trade & Consumer protection, which oversees the Unfair Sales Act, said her office never told the owner that his discounts were illegal.
Bhandari has been offering [image-nocss] senior citizens a two-cents-per-gallon price break and discount cards that let sports boosters pay three cents less per gallon, according to the Associated Press. He said he worries that customers will think he stopped the discounts because he wants to make more money. About 10% of his customers had used the discount cards.
He said he received a letter from the state auditor in late April saying the state would sue him if he did not raise his prices. He later claimed he never said that the state was going to sue him.
Wisconsin's Unfair Sales Act requires stations to sell gasoline for about 9.2% more than the wholesale price. The law requires wholesalers to mark up gasoline by 3% and retailers to add on another 6%. That means drivers should pay about 9% more than cost unless a station has dropped its price to match a competitor's.
Concerning Bhandari's situation, Bob Bartlett, president, Wisconsin Petroleum Marketing & Convenience Store Association, told CSP Daily News, It's something we're tying to nip in the bud because of the misinformation. In fact, a Wausau-area radio station was running a retraction of the story today. They were one of the first to break it. They had Janet Jenkins on the air and they debunked this retailer's story. We've confirmed this with the Department of Agriculture [Trade & Consumer Protection].
He added, There was never any investigation into this guy. There was never any threat. The state doesn't sue these retailers, so that was never accurate. He probably got desperate and probably has got a crappy margin, and he's trying to figure out ways to make it all work, and he made a bad choice. Then he talked about it and it has kind of spun out of control.
Attempts to do away with the Unfair Sales Act have been met with resistance by many state retailers who say that it promotes fair competition and does not artificially raise the price of gasoline. Based on the example of other states, they say consumers would be paying more for gasoline without the law, which they say prevents large operators from entering a market, selling gasoline at a loss to drive competition out, then raising prices.
Click the Download Now button below to view a statement from Bartlett, Wisconsin's Fair Marketing Law Keeps Prices Lower: It's Time To Get The Facts.
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