Coalition for Lower Gas Prices: Consumer group applauds action to help lower prices at the pump and encourages lawmakers to provide even more consumer relief on cost of motor fuels

MADISON – Gov. Jim Doyle deserves praise for halting enforcement of the minimum markup law on ethanol blended fuels, leaders of a consumer coalition said Thursday.

The Coalition for Lower Gas Prices also asked that the action be extended to all fuel blends by repealing the minimum markup statute that requires higher prices at every pump. This effort would provide consumers immediate and real relief from rapidly rising prices. Under the Depression-era minimum markup law, retailers are required to mark fuel prices 9.18 percent above wholesale costs.

“In times of high prices—as we’re experiencing now—the minimum markup law provides a tremendous windfall for a relatively few gas station owners at the expense of all Wisconsin consumers,” said Kennan Wood, a spokesman for the Coalition for Lower Gas Prices. “At current prices, the minimum markup is costing consumers almost 26 cents for every gallon they pump. We applaud the governor for taking a stand for the people of Wisconsin by halting minimum markup enforcement on ethanol blends, but more can and should be done.”

The consumer group says that at current prices, after allowing for appropriate margins, the minimum markup could cost gasoline consumers more than $350 million more per year and cost purchasers of diesel fuel about $100 million more. “The average gross margin for gasoline and diesel retailers nationwide—that is, the amount they take to cover non-fuel costs and generate profits—is about 12 cents a gallon,” Wood said. “If Wisconsin retailers merely accepted this average level of profitability, consumers could save nearly a half a billion dollars a year.”

“The governor’s action on ethanol will help motorists save at the pump, but the Coalition for Lower Gas Prices believes a long-term, legislative solution is needed,” Wood said. “The minimum markup law has been unfairly siphoning huge amounts of money out of the pockets of Wisconsin residents for years and our families and our businesses deserve lasting relief.”

In coming weeks, Wood said the Coalition for Lower Gas Prices will be contacting legislative candidates to learn more about their position on the minimum markup.

“Since the minimum markup is calculated as a percentage of the price per gallon after state and federal taxes are figured in, the current high wholesale costs add to the negative impact on our families and our economy,” Wood said. “We’re eager to learn which candidates are willing to stand up for consumers and, like Gov. Doyle, take meaningful action.”