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ALBANY, N.Y. -- A New York State law setting a minimum retail price for gasoline has been signed by Gov. George Pataki despite the objections of the Federal Trade Commission (FTC) and New York's retailers. Under the provisions of the new law, which takes effect immediately, retailers cannot sell fuel at prices lower than 98 percent of total refiner and non-refiner costs.
The governor's approval of the Motor Fuel Marketing Practices Act is a major victory for the state's independent service stations. The governor vetoed a similar bill in 2002. This legislation was crafted to answer the objections in that veto message, The Albany Business Review reported.
The measure, according to Ralph Bombardier, executive director of the New York State Association of Service Stations and Repair Shops Inc., will stop big-box retailers and oil-company owned gas stations from putting independent service stations out of business. The measure is necessary to prevent predatory and unfair pricing, he said.
"We don't have to stand across the street and watch somebody sell below costs and watch our business go down the tubes," Bombardier told The Business Review. "This means we stay in business and the consumer, in the long run, benefits."
Fifteen states have similar measures. In his 2002 veto the governor laid out a roadmap to follow to make the bill acceptable and they did that, Bombardier said.
The Retail Council of New York State opposed the measure, as being an unnecessary restraint on trade. The group is hopeful the law will be changed to make it more palatable, said Ted Potrikus, the council's director of government relations. "We understand that there are some chapter amendments to come and we will be waiting to see what those say," he said.
Some opponents want to have the law changed to redefine the percentage of cost at which the measure kicks in from 98 percent to a lower measure, Bombardier said. So far, nobody has come forward with a concrete change, he said.
Potrikus said that while his group was disappointed with the governor's decision to approve the bill, they were grateful that he didn't rush to support the measure.
The Federal Trade Commission also opposed the bill. In a July letter to state Attorney General Eliot Spitzer, FTC officials argued that it would harm consumers and would be inconsistent with federal antitrust laws.