A statewide grocery chain is planning to add gas pumps at half of its stores, an attempt to draw consumers away from convenience stores – and possibly get new customers by undercutting prices offered at other gas retailers.

Tuesday, September 11, 2001

A statewide grocery chain is planning to add gas pumps at half of its stores, an attempt to draw consumers away from convenience stores – and possibly get new customers by undercutting prices offered at other gas retailers.

Any news that spells lower gas prices should be good news for Minnesota, but the state legislature, under pressure from convenience store lobbying, apparently didn’t feel the same way. It passed a law this year that forbids selling gas below cost – &uot;cost&uot; defined as the wholesale price, all taxes and fees, and an eight-cent or 6 percent markup, whichever is less.

The law clearly protects more traditional gas retailers from anybody who would challenge them by offering lower prices. But perhaps a little more competition is just what this ridiculous gas-price market needs. It’s understandable that Minnesota businesses who sell gas need to be able to stay competitive, and those retailers don’t deserve the blame for high gas prices that are determined by wholesale cost. But by protecting them we are also protecting the big oil companies that seem to be perpetuating price gouging.

There’s no guarantee that grocery gas will be sold at slashed rates, and there’s no guarantee that it would have any effect if it were. However, anybody who wants to sell cheap gas should be allowed to do so. If it’s below market price, then other stations can either lower their prices or lose business. How else can we put pressure on oil companies to keep their gasoline prices down? Convenience stores and other traditional gas stations have a monopoly on gas, and the state’s new law is preventing it from being broken up.