Wisconsin 's mandatory fuel markup bill advances

| Friday, December 16, 2005

Wisconsin motorists would save nearly 8 cents per gallon at the pump under an effort recently approved by a Senate panel.

The Senate Judiciary, Corrections and Privacy Committee voted this month to advance a bill that would reduce the state’s minimum markup requirement for motor vehicle fuels.

Sponsored by Sen. David Zien, R-Eau Claire, the committee’s chairman, the bill is a scaled-down version of one shot down in September that sought to repeal the entire markup for gasoline and diesel.

Wisconsin law now requires markups of at least 9 percent to the price consumers pay for motor fuels, alcohol and tobacco.

Adopted during the Depression era, the rule requires wholesalers to charge at least 3 percent more than they paid. Retailers in turn must add on at least 6 percent more.

The Wisconsin law was designed to prevent businesses from selling at a loss in order to drive out competitors.

The latest version of the bill would eliminate the 3 percent markup for wholesalers and reduce the retailer markup to 4 percent, plus 3 cents per gallon.

It also would prohibit the sale of fuel below cost, and prohibit the sale of fuel as a loss leader.

The Coalition for Lower Gas Prices, a group that includes government and business – including Wal-Mart and Murphy Oil – is pushing for an end to the markup.

Craig M. Thompson, legislative director for the Wisconsin Counties Association, recently told the Milwaukee Journal Sentinel revising the markup law would be a way to reduce fuel prices without cutting sales tax on fuel, which pays for roadwork.

The Wisconsin Petroleum Marketers and Convenience Store Association, a group representing 2,000 fueling stations, convenience stores and automotive businesses, likes the law as it is.

Bob Bartlett, the group’s president, told the Journal Sentinel consumers benefit from the current law because more competitors stay in business, saving consumers money through price competition.

SB215 now heads to the Senate floor. If approved, it would move to the Assembly for further consideration. Gov. Jim Doyle has said he favors repealing the state’s minimum markup law altogether.

– By Keith Goble, state legislative editor
keith_goble@landlinemag.com

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