By Brooke Martin
The 2012 legislative session is approaching and lawmakers are looking to extend a fuel regulation. The bill puts a legal limit on the lowest price gas stations can charge for fuel. The Fuel Marketing Act says gas stations can’t sell fuel for a price below what they paid or it.
But why would a law prevent low gas prices? The concern is wholesalers will sell fuel below their cost to wipe out locally owned gas stations. Then when the wholesaler is the only shop in town, it will raise the price, and there will be no competition to keep it down.
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“It’s very important to have that law on the books to be able to have some recourse in the event there is an unfair situation that occurs in the market,” said Mike Sullivan, the owner of Mike’s Chevron in Orem says,
Supporters say the act will preserve competition among gas stations statewide. On the other hand, opponents say the legislation is anti-competitive and gas stations should be able to sell gas for the price they want.
Opponents like Rep. Derek Brown of Salt Lake argue the law gets the government too involved in the private sector.
“What we’re doing is we’re helping one group of individuals and not another,” Brown said. “We’re picking winners and losers and we’re doing it legislatively, rather than letting the free market make that decision.”
Brown also said the 37 states that don’t have this law haven’t had gas prices go up, and the reality is the law is never really used.
The legislature will consider the new bill in the upcoming session beginning in January.
