Midwest Oil fined for selling gas too cheaply

Star Tribune ^ | February 24, 2006 | Tom Ford,

[george76]

The state imposed a $140,000 penalty for what it called "willful, continuing, and egregious" violations of the price law...

The Minnesota Commerce Department on Thursday announced plans to fine a gas station chain $140,000 for repeatedly selling gas below the state's legal minimum price.

The fine against Midwest Oil of Minnesota is twice as large as any imposed on a company since 2001, when the state established a formula based on wholesale prices, fees and taxes to determine a daily floor for gas prices.

Kevin Murphy, deputy commissioner of the department, called the violations "willful, continuing, and egregious and warrant a substantial penalty."

The company has 30 days to contest the fine by requesting a hearing.

In previous cases, companies were fined anywhere from $500 to $70,000 for selling gas too cheaply.

Gov. Tim Pawlenty and several Minnesota legislators have urged a repeal of the state's minimum price rules.

Critics have argued that it ends up costing most customers an extra dollar or more to fill up, without adding to tax revenues.

[Mikey_1962]

That's the Minnesota I remember...

[thackney]

I'm from the government, and I'm here to help ya.

Bump

[tfecw]

So what's the idea behind these laws? Is it to keep the prices artificially high so the state can get more bang for it's 2% gas tax? Or is it part of some anti-competition thingy?

[benjamin032]

Think that the fines have to do with the taxes raised by gas sales? What is the tax rate on gas in Minn?

[Past Your Eyes]

Uneffingbelievable.

[oblomov]

In other words, they are accused of "price gouging" by selling gas too cheaply.

[1rudeboy]

So let's see, we have the democratically-elected government of Minnesota suing on behalf of Minnesota citizens in order to make certain that Minnesota citizens pay more for gas. Got it.

[DonaldC]

The purpose is probably to keep someone from just dumping on the market below costs just to take out competition.

[MadeInAmerica]

WTF? This is INSANE.

[evad]

Uneffingbelievable.

You would think but in Merry-land they have the same law.

[george76]

'...costing most customers an extra dollar or more to fill up, without adding to tax revenues..."

[KarlInOhio]

If you sell for too high of price you're gouging, if you sell for too low of price you're unfairly competing, and if you sell for the same price as your competitors you're colluding.

[tfecw]

Actually..I realize they *say* it's to promote competition, but i thought the practice used in the article (of a large company using other products to subsidize a product, undercutting the competition) was already against the law.

ugh...I'm having an extra hard time getting the thoughts out of my head today ;)

All i'm trying to say is I thought jacking a price on shampoo and using the extra money to lower the price on medicine for the purpose of running all the mom and pop pharmacies out of business was already illegal.

So my original question is why is there a special gas rule? Does the MN state legislator set all the min prices on all products?

[george76]

Some of the DUmmies believe that high gas prices will keep us from driving trucks, suvs, etc.

Which will then will stop global warming.

[sgtbono2002]

Yes: Here in Maryland we do have a similar law.

Its all about keeping big oil dealers like Wawa and Sheetz from underpricing and putting the local oil dealers who have local politicians in their pockets ,out of business.

[Koblenz]

The purpose is probably to keep someone from just dumping on the market below costs just to take out competition.

Just in case some newcomer might come along and take out ExxonMobil and BPAmoco....

[M203M4]

A fine for selling something too cheaply? Can't allow competition - it ain't fair to the (well connected?) businesses too stupid to adapt to the market.

What else is the directly being made artificially more expensive there by the government? Indirectly it is everything...

[Mark was here]

Simple violation of property rights. If you own the gas you can sell it for any price you choose.

If the State owns it, the state can set the price.

The Communist SOB's think they own it.

[AZRepublican]

Was min price fixing the result of some DFL grand illusion or what?