CONTACT: Kennan Wood
(608) 259-0757
Consumer group says increases due to minimum markup law now costing consumers an extra 22.5 cents for every gallon they pump; coalition calls on Legislature to repeal outdated law
MADISON — The average price of a gallon of regular unleaded gasoline in Wisconsin has shot up by 37 cents per gallon over the past month from about $2.55 a gallon to more than $2.92 and a Wisconsin consumer group, the Coalition for Lower Gas Prices, is demanding that the Wisconsin Legislature help consumers by repealing the state’s mandatory minimum markup on retail gasoline sales.
“The recent jump in gas prices has once again revealed how unfair to consumers, and unnecessary for retailers, Wisconsin’s minimum markup really is,” said Kennan Wood, a spokesman for the Coalition for Lower Gas Prices. “Assuming this increase holds, and everyone is saying it will, Wisconsin consumers will have to spend an extra $54 million dollars to drive their cars between now and Memorial Day due to the antiquated minimum markup law. The Legislature could cut that bill by repealing the minimum markup and we think they ought to take action quickly.”
Wisconsin’s mandatory minimum markup requires gasoline retailers to add 9.18 percent to the cost of every gallon of gas they sell. And, because the markup must be calculated after state and federal taxes have been included, the markup currently costs consumers about 22.5 cents for every gallon of gasoline they purchase.
According to WisconsinGasPrices.com, the average price for a gallon of unleaded regular gasoline on March 25, 2006 was about $2.55. By April 26, 2006 the cost had shot to more than $2.92.
“The overall jump in gasoline prices over the past year is costing Wisconsin consumers some $2.6 million per day and the minimum markup, which guarantees profits for retailers, is adding insult to injury,” said Wood. “The retailers always defend the mandatory markup on the grounds that they need it to cover their operating costs, but because of the way the formula works, the markup gives them bigger profits the higher wholesale prices go. That’s just not right, and it’s not good for Wisconsin’s economy.”
In November of last year, the coalition’s research indicated that the minimum markup was costing consumers 17 cents per gallon. The current 22.5 cent per gallon markup gives the petroleum marketers a boost in profits of more than 30 percent—in less than six months.
“We know the retailers’ operating costs didn’t go up that much,” said Wood. “Wisconsin consumers have spent millions more than they should due to the minimum markup since last November. If the Legislature had taken action to repeal the minimum markup then, consumers might not have saved all of that, but they sure would have been spared a lot of pain at the pump.”
