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MILWAUKEE -- A bill that would eliminate Wisconsin's minimum markup requirement for gasoline was introduced Tuesday in the state Senate, the Milwaukee Journal-Sentinel reported.
The bill, introduced by Sen. David Zien, R-Eau Claire, strikes provisions in state law requiring markups of 3 percent to 9.18 percent for wholesalers and retailers.
The current law, which prohibits the sale of gas below cost, is designed to protect small gas station owners from predatory pricing by larger competitors.
The Coalition for Lower Gas Prices, a group that includes government, non-profit organizations and businesses including Wal-Mart and Murphy Oil, has pushed for an end to the minimum markup on gasoline for several years.
"AAA and other members of the coalition feel the minimum markup law is not able to serve the intent it originally was intended to serve," said Ernie Stetenfeld, vice president of corporate relations for AAA.
A study by a consulting firm commissioned by the coalition estimated that the law is adding 1.3 to 1.8 cents per gallon to the price of gasoline, costing Milwaukee County consumers an additional $5.5 million annually.
Craig M. Thompson, legislative director for the Wisconsin Counties Association, said revising the markup law would be a way to bring down gas prices without cutting sales taxes on gas, which fund highway projects.
Bob Bartlett, president of the Wisconsin Petroleum Marketers and Convenience Store Association, said his group opposes Zien's bill and supports the current law.
The state law was enacted to prevent large companies from coming into an area and selling gas below cost to knock out competition. The large company, without competition, then could raise prices.
Bartlett cited a study from the Journal of Urban Economics that found minimum markup laws benefited consumers. Bartlett also noted that the existing Wisconsin law has exceptions that allow station operators to price gas to meet competition.