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The gas price question

To the editor:

I write in response to Mr. Ron Wendinger’s letter in the May 2-3, 2020, edition of The Journal regarding gas prices in New Ulm. Mr. Wendinger has hit on one of the consistent complaints I hear from folks either living in New Ulm, or sometimes just passing through town. Specifically, the concern people have with what appears to be the above average cost of gasoline in New Ulm. I get approached every year with complaints of “price gouging” by gas stations in New Ulm. While what is being described is not technically “price gouging” these complaints have increased with the current pandemic and the increased awareness of price gouging on other products.

Interestingly, in Minnesota there is no law with regard to how high a gas station may price a gallon of gas. However, there is a law with regard to how low a gas station may price gasoline. Minnesota Statute 325D.71 states in part, “Any offer for sale of gasoline by a retailer … that is below cost … is a violation….” While there are typically no criminal penalties that apply, there can be significant sanctions, including up to a $10,000 fine and the loss of the retailer’s license to sell. This law was actually designed in part to help protect small gas station owners from large convenience stores, supermarkets, or “big box stores” that could take a loss on gasoline just to get customers inside. Unfortunately, this law does nothing to help the average citizen in New Ulm who, as Mr. Wendinger points out, is sometimes paying 26 cents more per gallon for the same gas as our neighbors less than 30 miles away.

However, while gas stations may price gasoline as high as the concept of supply and demand will allow, they are prohibited from entering into price fixing schemes. All retailers are bound by federal and state Antitrust Laws, which prohibit price fixing agreements (written, verbal, or inferred from conduct) among competitors that raise, lower, or stabilize prices or competitive terms. Both the federal and state Antitrust Laws carry penalties for any violations, including criminal penalties. If an individual feels that any businesses are unlawfully colluding to keep prices artificially high, they should contact the Federal Trade Commission and report what they believe to be an antitrust violation. Information on this process can be found at www.ftc.gov. Individuals may also contact the Minnesota Department of Commerce to report a suspected antitrust violation.

Chuck Hanson

Brown County Attorney

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