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MANITOWOC, Wis.--A proposal by an independent group of small gas station owners would save consumers nearly a dime per gallon every time they visit the pump--without the negative consequences of ending the state index formula that pays for road improvements, according to Wisbusiness.com.
Richard McDonald, president of the Lower Gas Prices--NOW! Coalition, told Wisbusiness.com that his group of gas station owners split from the Wisconsin Petroleum Marketers and Convenience Store Association last week over the minimum markup issue. McDonald owns a station in the Manitowoc, Wis.-area.
"Our proposal is simple and effective and would save consumers nearly a dime for every gallon of gas they buy," McDonald said in the report. "The current law elevates the profit retailers are allowed to charge through a formula that calculates their 6 percent markup on top of state and federal taxes. We’re proposing a change to the equation that would protect ‘mom and pop’ station owners like us without allowing the major chains to rake in millions of dollars at the expense of hard-working consumers."
Under the compromise proposed by McDonald’s group, a retail markup of 5 percent would be permissible, and would be levied based on the "rack" price at the nearest terminal, plus the cost of freight. The current formula requires a 3 percent markup on the wholesale price, with another 6 percent retail markup calculated after inspection fees, state and federal taxes are added in -- which takes money out of consumers’ pockets and puts it into the retail chains’ coffers, according to the report.
McDonald told Wisbusiness.com that the Lower Gas Prices--NOW coalition formed because members sensed growing urgency among legislators to find ways to reduce gas prices for consumers. Yet, a proposal also before the Wisconsin Legislature to eliminate state gas tax indexing would hurt road building and economic development efforts throughout the state. Meanwhile, a competing proposal to eliminate the minimum markup law completely would drive more independent retailers out of business.
"We know action is needed because with gas prices at historic highs, consumers need relief," McDonald said in the report. "The current law puts more money into retailers’ pockets the higher gas prices go, and it’s benefiting the big chains disproportionately because they sell more gas. We’d like to bring some fairness back into the mix for everyone concerned."