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Butterworth asks for fuel law repeal

Saying the public has been "lost in the shuffle,'' the attorney general asks legislators to overturn the controversial law.

By LUCY MORGAN

© St. Petersburg Times, published March 27, 2001


Saying the public has been "lost in the shuffle," the attorney general asks legislators to overturn the controversial law.

TALLAHASSEE -- Attorney General Bob Butterworth called on legislators Monday to repeal a controversial 1985 law that prohibits gas stations from selling fuel below the cost charged by refineries.

In a letter to the House and Senate sponsors of bills that would repeal the Motor Fuel Marketing Practices Act, Butterworth said he believes the law may keep Florida gasoline prices higher than they would be without it. The law originally was aimed at stopping major oil companies and refineries from forcing small gas stations out of business.

Butterworth's recommendation is good news for Wal-Mart and Murphy Oil Co., who want to offer discounted gas at pumps outside Wal-Mart supercenters cross Florida.

It is bad news for small retailers who have been fighting to keep the law.

The battle between Wal-Mart and Murphy on one side and small distributors and stations on the other started last year when other distributors sought a stronger version of the law.

The request came just as spiraling gas prices had Floridians up in arms over the high cost of filling their tanks. Legislators backed away from doing anything to make discounting harder.

This year, Wal-Mart and Murphy came back with a request to repeal the old law, arguing that it has cost Floridians millions of dollars and has blocked the use of discount cards.

Florida is one of just 10 states with a law that restricts below-cost sales. The law was passed in 1985 as part of a compromise between wholesalers and dealers on one side and the major oil companies and refiners on the other.

"No one argued that the law was perfect," Butterworth wrote in his letter. "Lost in the shuffle was the public. No one could predict with any reliability that the law would provide any direct benefit to the average person. The only thing the parties to this less-than-perfect compromise knew for certain was that they had each managed to protect their own business interests for another day."

Wholesalers and dealers who want to keep the law say repealing it could run small gas stations out of business and result in price increases over the long term.

But Butterworth said existing anti-trust and predatory pricing laws and consumer protection laws will ensure the continued viability of the marketplace.

"With the repeal of the Motor Fuel Marketing Practices Act, consumers should see the benefit of competition in the Florida retail gasoline market in the form of lower prices," Butterworth wrote.

No one can predict market prices, he added, but the benefit to the public should not be constrained by artificial definitions of "below cost."

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