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The fuel business is slowing down at gas stations and convenience stores throughout Louisiana, but a constant flow of vehicles stops at a Murphy Oil USA station outside local Wal-Marts.
The lure is gas as low as $1.48 a gallon. By contrast, the starting price at the Gator Stop convenience store and an independent Shell ETD convenience store is $1.54, the Associated Press reported.
"They're selling below what we pay," said Pete Schefferstein, manager at Gator Stop. He and other retailers claim Wal-Mart's price structure is aimed at eliminating competition, an allegation the retailer and Murphy deny.
Similar battles are being fought from coast to coast. The hundreds of stations outside Wal-Marts and their Sam's Club warehouse sister stores aren't the only target. Supermarket chains, including Albertson's Inc., Costco Wholesale Corp., Stop and Shop Supermarket Co. and Safeway Inc., are also putting up pumps.
Kevin Stetler, who operates University Exxon in Shreveport, La., claimed the Murphy USA station at the Wal-Mart next door has cut his gasoline business from 150,000 gallons to 100,000 gallons a month. "I would really like to see better pricing by these people," he said. "But it's free enterprise. If you want to buy it and give it away, it's your right."
But that's not necessarily so in Louisiana, according to the AP, where the state's unfair sales law clearly bans such tactics.
The state law reads "No retailer or wholesaler shall advertise, offer to sell, or sell at retail any item of merchandise at less than cost." But that law could be changing - a bill allowing stations to set gas prices as low as they want recently passed the state Senate by a wide margin.
The current state law sets minimum markups by retailers, but it does not mention manufacturers selling directly to the public. That omission could provide cover to Murphy USA, which owns and runs the Wal-Mart stations from the East Coast to Texas. In the Far West, Tesoro Petroleum Co. has a similar arrangement under the Mirastar brand name.
"We do not predatory-price. We do not use gasoline as a loss leader. This is what we do - making a living off it," Charles Ganus, senior vice president for marketing at Murphy USA, told the AP. However, predatory-pricing lawsuits are pending against Murphy in Florida, Oklahoma and Louisiana.
Part of the reason Murphy can sell so low is that its operation is almost entirely at the self-serve pumps, Ganus said. "We have a low-cost operation, not a big ole huge operation with a big ole huge (convenience) store."
All told, Wal-Mart Stores Inc. has 460 stations - 103 Sam's Club, 39 Mirastar and 318 Murphy - and more under construction and planned, the report said.