Deep gas discounts limited by law in Minnesota

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A major gas station chain outside of Minnesota is promoting a $3.99/gallon cap on July 4. Could it happen here? It depends.

ST ANTHONY, Minn. — Just below the gas prices that are posted outside Murphy’s service center in St. Anthony, a simple message has caught the attention of drivers in recent weeks.

“We also hate our gas prices,” the sign reads.

“I put it together because I’d like my customers to know that we’re frustrated with it as well, and we don’t like to put those high numbers and we have empathy for them,” Chuck Graff said. , whose family operated the station for more than 60 years. “I thought the message hit home a little more in those days than ‘two Snickers bars for $2’ or something.”

Not only was Graff right, but the message didn’t just hit home here.

“It went a bit viral,” he said. “Everything, local, regional, national, even the Daily Mail in the UK had an article about it.”

According to a new Gallup poll67% of Americans, down from 52%, now say gas prices are causing financial hardship, but Graff says most customers have understood the limitations and inherent costs that stations like to face to keep prices low .

Over the years and many price fluctuations, he says the margins don’t really change much.

“Usually we’ll make 8 to 18 cents – that’s what you’re trying to do – on a gallon of fuel in order to stay profitable,” he said. “You have to pay to maintain your pumps, pay all your licenses and everything. There are a lot of expenses that go into running gas stations.”

So where does all the rest of our money go when we fill up? According to the US Energy Information Administration, in May, 59% of the price per gallon was related to the cost of crude oil; 26% were related to refining; 5% went to distribution and marketing; and taxes accounted for 11%.

On top of that, as prices go up, Graff says so do credit card fees.

“You’re paying 2 to 3 cents on the dollar, and if you’re figuring close to $5 for a gallon of gas right now, that’s a significant credit card charge that we have to pass on in order to still make some profit for ourselves. ,” he said.

Despite so many cost considerations just to break even, Sheetz, which operates more than 500 gas stations and convenience stores from Pennsylvania to North Carolina, just capped its 88-octane price at $3.99 a gallon. . The company says it will continue the promotion throughout the busy 4th of July weekend.

If a similar promotion were to be attempted in Minnesota, it would be reviewed by the state and would likely be more limited. According to state law it is generally illegal to sell gasoline below wholesale, but the law provides an exception for below-cost promotions if they are limited to a maximum of three days every three months. The Minnesota Department of Commerce is responsible for policing “Gas price below cost” and investigation based on complaints (often filed by competitors).

If a chain in Minnesota were to try it as a way to boost sales of food and other items, Graff says it would be hard to compete.

“They obviously have a lot more capacity to absorb that kind of hit than we small businesses do,” he said. “I would literally give thousands of dollars if I did that and I can’t afford to.”

For now, neither he nor the other owners have to worry. Although more and more Americans claim that high prices are taking their toll, AAA is still predicting record road trips this holiday weekend.

“I’m a little surprised it’s been so strong with rising gas prices,” Graff said. “My volume, so far, hasn’t dropped significantly at all. I know there’s going to be a breaking point that I think we’re getting close to, people are going to start parking their cars, and they will go 50 miles north instead of 200 miles north.”

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