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Updated: 8:49 PM Jul 29, 2008
Wisconsin Law Encourages Competition While Raising Gas Prices
With high gas prices on everyone's mind anything that adds to the price doesn't make drivers happy. One Wisconsin law technically called the unfair sale act or what most people know it as: the minimum markup law. Posted: 8:12 PM Jul 29, 2008Reporter: Megan Peterson Email Address: megan.peterson@weau.com |
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With high gas prices on everyone's mind anything that adds to the price doesn't make drivers happy. One Wisconsin law technically called the unfair sale act or what most people know it as: the minimum markup law.
It’s a law requiring gas stations to add on about $.30 to every gallon of gas they sell.
Tacking on that extra $.30 to already expensive gas makes the act seems like a bad idea.
But two local representatives say the unfair sales law is important and needed. Most people seem to be in agreement that something needs to be done to lower gas prices.
People we talked to said, "It's harder to make ends meet."
"With getting to work and gas prices and everything else it really cuts in to family fun time."
"We have to drill and we need alternative energy sources. It's that simple."
Republican Representative Terry Moulton agrees. He says he’s all for lowering gas prices. But he says keeping this act in place helps consumers more than it hinders them because it creates competition and prevents a big business from taking over.
He says big businesses would use it as a loss leader item and try to attract people to them. Meanwhile the small mom and pop stores around have to go out of business because they just can't keep up with that kind of competition. He says pretty soon they would control the marketplace.
The law mandates a 9.18% markup on gas in Wisconsin. As the wholesale price of gas increases so does the mark up percentage. In the past year the markup price per gallon of gas increased 44% since the wholesale price has been continually rising.
The unfair sale act used to also include grocery stores that had to add a specified amount to their products. That portion of the law was removed in 1986. Democratic Representative Jeff Smith thinks that was a big mistake.
Smith says, “Where are all the local grocery stores now? They're gone. Very rare to see. There is probably one mom and pop grocery store left in Eau Claire and that is precisely why it happened."
Smith says he doesn't want the same thing to happen to small business gas stations too. He thinks instead of getting rid of the law, solutions should be found to the rising gas prices.
Smith and Moulton both suggest more competition between oil companies and the use of more alternative sources to fuel. Smith also thinks setting a level of about $ .20 instead of allowing the percentage to increase with rising gas prices would be another idea to think about.
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