Proposed bill would ban the sale of gasoline at less than cost

March 14, 2001

Proposed bill would ban the sale of gasoline at less than cost


Gas station owners testified Tuesday they'll go out of business unless the Maryland General Assembly protects them from predatory pricing by large convenience stores.

Because they aren't obligated to buy a particular brand of gas, stores like Sheetz and Wawa are able sell gas for less than they paid for it, the service station owners testified.

When that forces the neighborhood gas station out of business, the convenience stores raise their prices, the gas station owners told the House Economic Matters Committee.


"We are not dinosaurs and we don't want to be extinct," said Melvin Sherbert, who owns two gas stations, one in Prince George's County and the other in Anne Arundel County.

A bill before the legislature this session would protect them by banning the sale of gas at less than cost.

Howard "Blackie" Bowen, president of Ewing Oil in Hagerstown, testified in favor of the bill to help the 80 gas stations he supplies.

Bowen said some of his customers have gone out of business because of predatory pricing.

The only opponents of the bill are the two convenience stores that have been accused of the practice, he said.

"I'd just like to make that point," he said.

Representatives from Sheetz and Wawa denied the allegations and said the bill would hurt consumers by driving up the cost of gas by 1.5 cents to 4 cents a gallon.

The convenience stores argued they are at a competitive disadvantage because they don't sell brand-name gas.

Del. John P. Donoghue, a member of the committee hearing the bill, said he once asked a member of the Sheetz family if it was fair to lower the price until the competition went out of business.

"His response was, 'Wal-Mart does that every day. What's wrong with that," he said.

Donoghue, D-Washington, has filed separate legislation concerning gas station pricing that was also heard by the committee Tuesday.

His "truth in advertising" bill would stop gas stations from advertising "mid-grade" gas as "premium" on their highway signs.

There are three grades of gas, regular (87 octane), mid-grade (89 octane) and premium (93 octane).

While the law already prevents gas stations from changing the names of the grades on the pump, it is vague about the signs, said Bob Crawford from the Maryland Comptroller's Office.

No one testified against Donoghue's bill.

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