An effort in the Wisconsin Legislature to reduce the state’s
minimum markup requirement for motor vehicle fuels has died. It sought to save
drivers nearly 8 cents per gallon at the pump.
The Senate voted 19-13 May 4 to send the bill back to
committee for more study. The move effectively killed the bill – SB215 – because
the session wrapped up the following day.
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.
Sponsored by Sen. David Zien, R-Eau Claire, and Sen. Tom
Reynolds, R-West Allis, the bill would have eliminated the 3 percent markup for
wholesalers and reduced the retailer markup to 4 percent, plus 3 cents per
It also would have prohibited the sale of fuel below cost,
and prohibited the sale of fuel as a loss leader.
“I don’t think most of my colleagues understand how
offensive it is to the average person that Wisconsin law requires a 9.18
percent markup on (fuel) in order for (fuel) stations to make a profit,”
Reynolds said in a written statement. “Rather than protecting the profits of a
few businesses, we should be protecting the pocketbooks of people who are
struggling to afford basic necessities because of the high price of (fuel).”
The Coalition for Lower Gas Prices, a group that includes
government and business – including Wal-Mart and Murphy Oil – pushed for an end
to the markup.
Craig M. Thompson, legislative director for the Wisconsin
Counties Association, previously told the Milwaukee Journal Sentinel that 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 newspaper
consumers benefit from the current law because more competitors stay in
business, saving consumers money through price competition.
Zien said he will continue to push for the repeal of the
minimum markup. The earliest it likely could be brought back up for
consideration is in the legislative session that begins in January 2007.