Minnesota cracks down on cheap gas

[Dissipate]

Minnesota cracks down on cheap gas

ST. PAUL, Minn. (AP) ? Just in time for the Memorial Day weekend and as the cost of gasoline continues to climb nationwide, Minnesota is cracking down on service stations over gas prices.
Prices that are too low, that is.

A law the state adopted in 2001 in an effort to protect small service-station businesses prohibits gas stations from selling gas without taking a minimum profit. They must charge at least 8 cents per gallon, plus taxes, more than they paid for it.
Yesterday, the Commerce Department announced a $70,000 fine against Arkansas-based Murphy Oil for breaking the law at its 10 Minnesota stations, based at Wal-Mart stores and elsewhere. They also fined Kwik Trip Inc. $5,000 for violations at one station in Apple Valley, about 20 miles south of St. Paul.
The two are the first fines levied under the law, and were a result of a months-long review of the stations' prices, the department said.
"It doesn't feel good," said Jeremy Haack, store leader at the Apple Valley Kwik Trip. "We try to give a little break to the consumers, and we're the ones getting fined for it?"
Carol Hockert, director of the department's weights and measures division, said she receives as many as 100 complaints a week, mostly from competitors convinced neighboring stations aren't charging enough.
According to AAA, gasoline is about 60 cents higher this Memorial Day weekend than last.
Jerry Charmoli, an owner of three Mobil stations in the Minneapolis-St. Paul suburbs, said large-volume retailers will drive competitors out of business, and "then they're going to charge $2 or $3 a gallon because they're the only ones that are left."

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Moronic bureaucrats at work again, that's all I have to say.

 

[Zebo]

wow I thought price fixing was illegal...guess it's ok if the governemnt does it.

 

[etech]

Originally posted by: Zebo
wow I thought price fixing was illegal...guess it's ok if the governemnt does it.

This might be fun.

Zebo, did you read the article? Did you read why this law was passed?

Do you just try and take any post that is made and turn it into some sort of anti-government rant?

 

[Zebo]

Ya and?... Welfare for gas station owners who can't compete at the consumers expense and violating the law to do it. So many problems damn right it's a governemnt "rant"

 

[imported_Aelius]

This isn't free enterprise. Its protectionism.

Many state governments are guilty of this.

If I had the time I would spend a day or two digging around to find out whom provides campaign funding for the Gov. of that state and who is bum buddies with whom. I'm sure there is more than a few political angles to this. There almost always is when government's like this do actually act.

Why?

Gee why don't they act in so many other cases when its obvious that price fixing is going on. Its hypocritical. Thats what this is.

 

[etech]

Zebo,

So, you don't think that the government should interfere at all in the market place? Interesting, Zebo, I hadn't seen that side of you before. Id dn't think you would espouse laissez faire.

I actually don't go that far. I think the government does have some role to play in insuring that there is a level playing field. I believe that it should be as little as possible but definately a role.

 

[Moonbeam]

Zebo, the guys breaking the law are the ones charging too little as saintly behavior since they make their money selling other stuff, mostly, and threatening mom and pop gas stations with extinction. You got that, right? I figure if you let the small stations be driven out of business like happened here in California the people in Minnesota will soon be paying what we do for gas. Once a few large companies pump all the gas you're screwed. I'm with etech on this. Some gov regulation is required to prevent monopolistic situations from developing.

 

[Zebo]

The governemnt has a duty to promote general wefare of it's citzenry how you define it is quite different than me. I start from the bottom rungs of society not the top who need it least. I don't believe the governemnt should engage in pre-emptive price fixing for already reasonably well off station owners, those who need help the least, while the consumers get gouged since 2001 to support thier lifestyle. Finally when monopoly actually does rear it's head then the governemnt has a duty to step in, once again to protect those same consumers.

 

[Zebo]

Originally posted by: Moonbeam
Zebo, the guys breaking the law are the ones charging too little as saintly behavior since they make their money selling other stuff, mostly, and threatening mom and pop gas stations with extinction. You got that, right? I figure if you let the small stations be driven out of business like happened here in California the people in Minnesota will soon be paying what we do for gas. Once a few large companies pump all the gas you're screwed. I'm with etech on this. Some gov regulation is required to prevent monopolistic situations from developing.

Too nanny for me. . The anti-trust laws are there to prevent "situations form developing" that they are not enforced is the problem, the solution is not to throw more gas on the fire, making the governemnt a monopoly price fixer.

 

[NightCrawler]

The real issue is that the wholesale price is to high and that there are to many taxes on gasoline. The 8 cents of profit per gallon is really not a big deal.

 

[Dissipate]

I have a question for the protectionists of this thread such as etech. What makes you think that gasoline is different than any other thing in the economy, why does IT need protectionist policies when orange growers, furniture manufacturers, consultants and everything else do not?

The idea that industries need price floors to "protect" the small guy and "insure" that monopolies do not arise is absolutely absurd. In fact there is no such thing as a natural monopoly, a monopoly that is the result of natural phenomenon in the economy.

The Myth of the Natural Monopoly

 

[imported_Aelius]

The only thing that should be protected is government services/responsibilites.

If the obvious reason isn't clear as to why, then you shouldn't even be arguing this point.

Everything else should be in a free market.

Sadly today its a huge mess and it would require drastic changes to correct this.

 

[SuperTool]

It's an anticompetitive practice and should not be tolerated.
Wal-Mart can subsidize gas to run local gas stations out of business and then have monopoly in the market.

 

[Moonbeam]

I know that independents were driven out of California and I know our gas price is high, higher than warranted by our special blend. I know the corporations own their own stations now and you pay 50 cents to get some water or air. I know that many many families used to own stations and they would wash your windows. I think you free market folks are dreamers. So we eliminate all the small fry from the gas station business then we find we have a monopoly or price fixing so we fix this how. Force the corporations to sell their stations to independents? How about a few laws that keep the mess from happening in the first place.

 

[Zebo]

Fine with me Moon. Lets be equaitable then. Want to start selling widets, fine you must make 10%. Building a spec house same thing. Just be sure raise the minimum wage to $20 an hour so the poor can afford to buy things. Also this will increase compition in the market place since you're almost guaranteed to make a profit but going it alone. Heck the minium wage might increase to $30 an hour automatically just because it so easy to make money in business with government price fixing employers will HAVE to pay people that much to retain them.

We should just get rid of money altogether like I've advocated before and do what you want and take what you need like a pigmy tribe

 

[sandorski]

If Canada, Mexico, or some other Oil rich country began selling Gas in the US below cost, I wonder how many would change their minds on this issue?

 

[imported_Aelius]

Far as I know the largest oil deposit in the world is actually in Canada. But apperantly its a slush of oil and sand and right now it costs too much to separate it so no one is touching it. Although they are trying to come up with ways to cheaply separate it. Would probably help a ton with prices if they pulled it off.

 

[PingSpike]

I don't know where I stand on this. I think there's some good points made on both sides. Although I still think we should tax gasoline more and reduce other taxes, or use the funding for alternate energy research and repairing the roads.

 

[imported_Aelius]

Alternate energy would probably get 90% of the popular vote in the US but it doesn't count since those 90% don't own Oil companies and/or aren't in bed with them.

We are talking about a multi trillion dollar a month, not year, comodity. No one is going to give it up just like that.

Even hybrid vehicles are on a very very loose footing. Imagine if by this time next year every car sold would be a hybrid. Would be good for the environment and your poket book but not for the Oil companies. They will loose trillions.

 

[sandorski]

Originally posted by: Aelius
Far as I know the largest oil deposit in the world is actually in Canada. But apperantly its a slush of oil and sand and right now it costs too much to separate it so no one is touching it. Although they are trying to come up with ways to cheaply separate it. Would probably help a ton with prices if they pulled it off.

Not sure if it's the largest, but it is being extracted, has been for over 30 years. Here's a link to some info on it, not very specific though. I spent part of my childhood(4 years 8-12) in Fort McMurray, my Dad worked for GCOS(Great Canadian Oil Sands--now changed) . Still have an Uncle that works there.

You are correct though, it is more expensive to produce, but as long as the price of Oil remains above approx $13/barrel it can be done profitably.

 

[Kappo]

Originally posted by: SuperTool
It's an anticompetitive practice and should not be tolerated.
Wal-Mart can subsidize gas to run local gas stations out of business and then have monopoly in the market.

Tell me how this is bad for the consumer?

Also, show me an instance where Wal-mart has driven someone out of business then raised the cost above what the normal price should be.

 

[Dissipate]

Originally posted by: SuperTool
It's an anticompetitive practice and should not be tolerated.
Wal-Mart can subsidize gas to run local gas stations out of business and then have monopoly in the market.

An "anticompetitive" practice that cannot be maintained. Suppose a big oil company sold below price and pushed everyone out of the market. Then they jacked up the prices. Do you really think that big oil company would be able to gouge their customers for very long before competition came around again?

This is nonesense. People think that once a gas station closes up it is gone for good. They might go out of business for the duration of the time that the big gas station has undercut them, but once prices go back up, they will be back in business undercutting the big company.

The only forces that would enable a big oil company to maintain its monopoly are government regulations, and anti-market laws that would create artificial entry barriers to startups. End of story.

 

[Kappo]

Originally posted by: Aelius
Alternate energy would probably get 90% of the popular vote in the US but it doesn't count since those 90% don't own Oil companies and/or aren't in bed with them.

We are talking about a multi trillion dollar a month, not year, comodity. No one is going to give it up just like that.

Even hybrid vehicles are on a very very loose footing. Imagine if by this time next year every car sold would be a hybrid. Would be good for the environment and your poket book but not for the Oil companies. They will loose trillions.

Forgot this one

I am not sure where you think the oil companies are supposed to do anything...

My impression is that any business's purpose is to make money. As much as they can in a short amount of time. Although I could be wrong

 

[imported_Aelius]

My post explains what I meant. I shouldn't have to re-explain what I mean.

Gee loss of trillions. Don't you think this would kind of put a sour taste in the mouth of oil tycoons?

Hence we don't get alternate energy cars or when we do get them they are extremely limited in supply and high in cost to discourage buyers.

 

[SuperTool]

Originally posted by: Dissipate

Originally posted by: SuperTool
It's an anticompetitive practice and should not be tolerated.
Wal-Mart can subsidize gas to run local gas stations out of business and then have monopoly in the market.

An "anticompetitive" practice that cannot be maintained. Suppose a big oil company sold below price and pushed everyone out of the market. Then they jacked up the prices. Do you really think that big oil company would be able to gouge their customers for very long before competition came around again?

This is nonesense. People think that once a gas station closes up it is gone for good. They might go out of business for the duration of the time that the big gas station has undercut them, but once prices go back up, they will be back in business undercutting the big company.

The only forces that would enable a big oil company to maintain its monopoly are government regulations, and anti-market laws that would create artificial entry barriers to startups. End of story.

Riight. I am sure people are going to be eager to pony up the money to open up a new gas station if they can be driven out of business by walmart's subsidized gas prices at any moment. It's anticompetitive practice that should not be tolerated. Just like we don't tolerate subsidies in our international trade.