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No gas-price break in legislature

Consumer groups fight an oil industry-backed bill to ban discounts on the sale of gasoline in Florida.


© St. Petersburg Times, published March 7, 2000

TALLAHASSEE -- Over the objections of consumer groups, the petroleum industry wants to ban gasoline discounts that Wal-Mart and some other businesses are offering in Florida.

The discounts are especially popular in these times of spiraling gasoline prices, but they apparently violate a 1985 law that prohibits the sale of below-cost gasoline in Florida.

Consumer advocates have joined forces to derail the petroleum industry-backed bills in the session that starts today.

"Kill this bill," urged Jackie Malone, a DeFuniak Springs businesswoman who joined consumer groups at a news conference Monday.

"Gasoline retailers should be competing at the pump, not in the Capitol."

Malone said she uses a Wal-Mart gift card that gives her a cash discount at neighboring Murphy Oil Stores to get the best price she can for her employees who travel a three-county area in North Florida.

AAA Auto Club South, a spokesman for Murphy Oil and consumer activist Ernie Bach of Largo were among those opposing the bills.

Kevin Bakewell, vice president of AAA, said gasoline prices in Florida are already up 43 cents a gallon over last year.

"We are powerless to do much about the price OPEC sets, but we can help consumers save," Bakewell said.

The issue is slated for discussion today in the House Regulation and Consumer Affairs Committee.

Rep. Dudley Goodlette, R-Naples, the sponsor of the bill, said he believes the proposal is needed to keep refinery-owned gas stations from running smaller business out and then raising prices. He said he was asked to sponsor the bill to clarify existing law. A similar bill has been filed in the Senate by Lisa Carlton, R-Osprey.

"I don't think it is anti-consumer at all," Goodlette said. "That is not a goal I would have in agreeing to sponsor this bill. If I were persuaded this is anti-competitive, it wouldn't be appropriate legislation to advance."

Carlton said she thinks opponents of the bill have used rising gas prices to scare people about the bill, which she said would actually protect consumers from predatory pricing.

The original law was passed in 1985 at the request of gasoline wholesalers and distributors who said they were being priced out of competition by refinery-owned stations.

Rick McAllister, executive director of the Petroleum Marketers, said the 1985 law has kept gas prices in Florida about 40-cents-a-gallon cheaper than the price in other states.

Opponents of the bill say the proposal would have its heaviest impact on poor people who can't get credit cards that offer a cash rebate, but could acquire Wal-Mart gift cards that offer 3-cent-a-gallon discounts. The cash rebates on gas purchases offered by some oil companies in conjunction with Visa and Mastercard apparently do not violate the law.

Rep. Willie Logan, D-Opa-locka, said he will fight the bill on behalf of the state's poor and disadvantaged residents.

"Prices have already increased tremendously," he said. "I support free-market competition."

Bach, spokesman for the Southwest Florida Action Coalition, said the bills should be labeled "the dumbest legislation of the year" and said petroleum marketers have raised a $400,000 war chest to help pass the bill.

McAllister said his organization has hired lobbyists Peter Dunbar and Billy Rubin to help its regular lobbyist, Mike Huey, but is not spending more than $75,000 on the effort. Their campaign contributions will total about $25,000, McAllister said -- about the same amount they always give to legislators and political parties.

Opponents of the bill have hired lobbyists Steve Metz and Guy Spearman.

"We had to have some soldiers on the street to offset that," McAllister said.

The adversaries also have dueling professors as experts -- one from the University of Florida and one from Florida State University.

"Studies conclude that these laws raise gas prices," said Philip Sorenson, an FSU economics professor who has studied the state's gasoline market. "These market protections cost Florida consumers about $150-million a year."

Florida is one of 10 states with a law on the books that restricts sales below cost, he said.

Roger D. Blair, an economics professor at UF, says Murphy Oil is using a "loss leader" tactic to sell gasoline at Wal-Mart centers by subsidizing the stations and making up the loss.

Blair said the arrangement poses a threat to the long-term interests of the state's gasoline market.

The Petroleum Marketers have also filed suit against Murphy Oil and Wal-Mart in Okeechobee County, accusing the two of violating the 1985 pricing law.

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