Push is on to remove Minnesota's mandatory minimum gas markup

A small bipartisan group of legislators on Thursday touted their plan to repeal Minnesota's minimum markup law on gas, saying it would save consumers money.

Rep. Dan Wolgamott, DFL-St. Cloud, Sens. Jordan Rasmusson, R-Fergus Falls, and Judy Seeberger, DFL-Afton, held a State Capitol news conference to highlight their bill. Current law requires gas retailers to charge an 8-cent markup per gallon of gas, known as the "minimum markup."

"In Minnesota, it is against the law to sell gas too cheaply," Wolgamott said. "You heard that right. Let me repeat that again. Gas retailers face legal action from the Department of Commerce if they sell gas too cheaply."

The bill repealing the markup has already cleared the House Commerce Committee and on Thursday the Senate Commerce Committee discussed it then set it aside to consider including in a broader bill later in the session.

All three said gas prices are a top concern for constituents, something they hear about often. "I think it's important that we put consumers first," Rasmusson said.

Their proposal drew immediate pushback from the Minnesota Service Station and Convenience Store Association. In a statement, the group pointed to a AAA gas chart showing that Minnesota's average price of $3.25 per gallon is below the national average, which was $3.37 on Thursday.

But Wolgamott said roughly a dozen states have laws similar to Minnesota's and the laws keep prices artificially high. Wisconsin is among those states and Democratic Gov. Tony Evers has proposed eliminating it there.

The law was designed to protect smaller shops from predatory pricing by larger chains. Stations who violate the law risk civil and criminal penalties.

During the gubernatorial campaign last year, former GOP state Sen. Scott Jensen offered a similar proposal. He predicted the change would save 20 to 25 cents per gallon.

Minnesotans who have memberships at Sam's Club or Costco can already buy cheaper gas because those giants are exempt from the law.

The Legislature repealed the law in 1984 but reinstated it in 2001. Researchers from the University of Wisconsin-Whitewater found that consumers actually paid an additional 2 cents per gallon after the law was repealed.

The legislators say laws against predatory pricing would remain and would still protect consumers and smaller shops.

Asked whether the bill has support for passage, Wolgamott said he hadn't taken a count, but "so far signs are good." He said the Commerce Committee chairs in both chambers support the change.

The Minnesota Department of Commerce is neutral on the proposal, according to a spokesman.