Retailer Ordered to Stop Selling Gas Below Cost

Midwest Oil receives $140,000 fine

Published in CSP Daily News

ST. PAUL, Minn. -- The Minnesota Department of Commerce said it plans to fine a gas station chain for repeatedly selling gasoline below the state's legal minimum price, reported the Associated Press.

The $140,000 fine against Midwest Oil of Minnesota, Shawano, Wis., is twice as large as any imposed on a company since 2001, when the state established a formula based on wholesale prices, fees and taxes to determine a daily floor for gasoline prices.

According to the Commerce Department, three Midwest Oil-owned stations in Anoka ([image-nocss] Anoka Exxon), Oakdale (Oakdale Exxon) and Albert Lea (Budget Mart) sold gasoline below the minimum price on 293 days in 2005.

The company has 30 days to contest the fine by requesting a hearing.

Minnesota law prohibits any retailer from engaging in unfair discrimination and competition by selling, offering or advertising gasoline below cost. State defines "cost" as the "average terminal price on the day, at the terminal from which the most recent supply of gasoline delivered to the retail location was acquired, plus all applicable state and federal excise taxes and fees, plus the lesser of 6% or eight cents." There is no governmental control on the maximum retail price of gasoline.

Midwest Oil has not fully cooperated with the department's investigation, Commerce Commissioner Glenn Wilson's office said. On more than one occasion, the company failed to produce requested or subpoenaed documents, provided incomplete responses and failed to meet department deadlines. Midwest Oil received several warnings to adjust its retail prices.

Kevin Murphy, deputy commissioner of the department, called the violations willful, continuing, and egregious and warrant a substantial penalty, added a Minneapolis Star Tribune report.

Midwest Oil is a subsidiary of the Shawano-based Science & Technology Institute, led by Dr. R.C. Samanta Roy.