Interpretations differ on discount gasoline ruling

Some say the decision ends discount sales. Others argue that is not the case.

By LUCY MORGAN

© St. Petersburg Times, published April 8, 2000

TALLAHASSEE -- The two sides in a legislative battle over discounted gasoline offer differing interpretations of a judge's recent ruling that some cut-rate offers violate a 1985 law designed to halt predatory pricing.

Murphy Oil and Wal-Mart say the decision effectively eliminates discount sales and are urging legislators to repeal the 1985 law.

The Petroleum Marketers say the court merely found that Murphy, a party in the suit, was consistently selling gas below cost to destroy competition. The marketers insist that nothing in the decision prohibits discount cards and credit card rebates.

Wal-Mart and Murphy Oil want to offer discount gift cards sold in Wal-Mart stores. They provide a discount of 3 to 5 cents a gallon at neighboring Murphy stations.

The rest of the state's gas stations object, saying Murphy refines its own oil and often sells gas at its own stations below the cost it sells to others. Those below-cost sales could drive competitors out of the market, say the marketers.

Legislators are caught in the middle of this war and will soon have to choose sides.

The 1985 law makes it illegal to discount gas below cost unless the seller is doing it to meet a competitor's equally low cost. The court says Murphy offered repeated discounts and could not prove it was making the offers to meet its competition.

The court also said anyone who offers a discount that takes the price of gas below refiner cost violates the law, a ruling that appears to apply to credit card companies that offer rebates on gas sales.

The war comes as gas prices across the nation have topped $1.50 a gallon.

Last week Art Jones, a Seminole resident, filled his tank at a station in mid-Pinellas County.

"While I was sitting at the pump, they increased the price 5 cents a gallon," Jones told the St. Petersburg Times. "How can they do that?"

© St. Petersburg Times. All rights reserved.