PUMP Pricing Proposal

Consumer group wants to restrict times gas stations can raise prices

Published in CSP Daily News

LANSING, Mich. -- Gas stations could only raise their prices one day a week under a proposal that Michigan voters could consider on next year's ballot, said a report by the Associated Press.

A group called People Against Uncontrolled Motor Vehicle Fuel Pricing (PUMP) has filed paperwork to get an initiative on the ballot in an effort to limit gasoline price swings and prohibit price gouging by only allowing prices to go up on Mondays.

We think it would curtail a lot of the reactionary pricing that's going on, PUMP leader Reginald [image-nocss] Patterson said.

Price increases that followed Hurricane Katrina, when a gallon of regular gasoline got higher than $3, was the final straw, he said. Patterson said limiting price increases to one day a week would create a mandatory cooling-off period for stations to determine whether price increases are justified after events such as hurricanes, refinery fires, terrorist attacks and power blackouts.

PUMP has started collecting the 254,206 signatures it would need by the end of May to get the issue on the November 2006 ballot, Patterson added.

A group representing gas stations said the resulting price freezes would be a recipe for financial disaster. If a retailer has to freeze prices, and a wholesaler raises the cost to dealers, what is the dealer supposed to do? said Ed Weglarz, executive director of the Service Station Dealers Association of Michigan. It's like freezing someone's pay and forcing them to work more hours, and I don't think the people pushing for this would stand for that.

Weglarz said the ballot initiative also shows a lack of understanding of the complexity of gasoline pricing and supply. Everybody wants a simple answer to a complex problem, he said.

Click here to visit PUMP's website. http://www.usapump.org