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Retailers fired up over pricing of gas

A petroleum group opposes the proposed repeal of a state law regulating gas prices, which would be the lowest in the nation but for taxes.


© St. Petersburg Times, published December 21, 2000

TALLAHASSEE -- As you fill up your tank for holiday travel, it may surprise you that pretax gas prices are lower in Florida than in any other state, according to the most recent federal statistics.

But the real price of gasoline -- with taxes -- is higher in Florida than in 19 other states.

In a fight brewing over whether to repeal a state law that prohibits the sale of below-cost gasoline, one side wants you to remember the first statistic. That 1985 law, gasoline retailers say, is what's keeping pretax prices so low.

Yet without the law, the real cost of gasoline would be even lower, say opponents, led by Wal-Mart, which wants the law repealed so it can sell low-price gasoline at its superstores.

AAA Auto Club South says drivers would be better off if the law were off the books.

"We, as a matter of policy, would support the repeal of that," said Kevin Bakewell, vice president of AAA Auto Club South. "It's better to just let the market do what it's going to do."

State Sen. Ginny Brown-Waite, R-Brooksville, is preparing to file a bill during the 2001 legislative session to repeal the law, and a House sponsor is expected soon. To gear up for the fight, gasoline retailers held a news conference Wednesday in Tallahassee to argue for protecting the law they say already keeps prices low.

For proof, the Florida Petroleum Marketers and Convenience Store Association pointed to statistics from the federal Energy Information Administration for September, the most recent month available. Excluding local, state and federal taxes, Florida had the lowest average per-gallon price for regular unleaded gasoline -- $1.03.1 -- in the nation. Texas, at $1.03.2, was second.

"The fact is, we have a system that produces the best price," said Rick McAllister, the group's president.

That system was created by the 1985 law, which prohibits retailers from selling gasoline for less than what they paid for it. Without such protections, say Florida's independent retailers, stores such as Wal-Mart and its supplier, Murphy Oil Co., would price them out of business.

Once that happens, it's the consumer who will suffer, said Charlie Roberts, a petroleum distributor for 10 service stations in the Tallahassee area. "As soon as there's no competition, the prices are way higher," Roberts said.

Nonsense, says Ernie Bach, executive director of the Coalition for Lower Gas Prices, a Largo-based group backed by Wal-Mart and Murphy Oil.

If Wal-Mart or any other store jacked up the cost of gasoline after putting smaller retailers out of business, Bach asked, wouldn't the little guys simply jump back into the market?

"It would be a cycle that is not beneficial to good business. That doesn't happen," Bach said.

Bach also dismisses the federal statistics, which he says compare "apples to oranges." Thirty-two states -- but not Florida -- are required by federal regulators to use specially formulated gasoline that causes less environmental harm, he said. That requirement drives up gas prices in those states by at least 6 cents per gallon.

According to AAA Auto Club South's daily fuel gauge report for Wednesday, the average price of regular unleaded gasoline was $1.45.5 per gallon in Florida, placing it 20th-lowest among the 50 states and the District of Columbia. The cheapest gasoline was in Missouri, where drivers paid $1.27.05; the most expensive was $2.03.18 in Hawaii. (The report is available at www.aaasouth.com.) Only six states have higher taxes on gasoline than Florida, the gasoline retailers say. On average, consumers pay 26 cents per gallon in local and state taxes, depending on which county they live in.

Those taxes, and the prices charged by the oil refiners that sell gasoline to retailers, are to blame for high prices at the pump, the retailers say, not the law they are fighting to protect.

A potential repeal of the law "scares us to death," said McAllister, who leads the retailers' association. "And (it) should scare the consumers of the state."

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