Louisiana Bill Fuels Debate on Gas Pricing

BATON ROUGE, La. -- A Louisiana lawmaker wants to alter a controversial state law requiring gas stations to mark up their prices 6 percent, setting the stage for a battle in the Legislature over gas price regulation during the upcoming session.

According to the New Orleans Times-Picayune, the bill offered by Rep. William Daniel (D-Baton Rouge) says that in place of the existing law, retailers should not sell motor fuel below the cost of acquiring the fuel, plus taxes and transportation charges.

The proposal opens a debate on two fronts: whether the state should have laws setting a minimum level for gas prices and which state agency should enforce such a law.

The issue rose to the fore recently when Agriculture Commissioner Bob Odom named himself the state policeman to audit gas stations across the state to make sure they were not selling gas too cheaply.

Odom claimed he has the authority over gas stations to apply a largely ignored 1940 Unfair Sales Act that requires retailers of all kinds to sell their products for at least a 6 percent markup over the wholesale cost. A Senate panel last week disagreed and voted to strip Odom of that authority, but the commissioner said he may be able to continue his regulatory role anyway.

Odom said last week he would seek an opinion about his authority from the state attorney general, but a spokeswoman for the attorney general said no one had asked for an opinion as of Tuesday afternoon. Odom did not return a phone call to the Times-Picayune Tuesday.

Daniel's bill does not spell out which agency would enforce his law. Daniel said it is not intended specifically to trump Odom's initiative to be the regulator, but he added that he thinks the regulatory role belongs with the attorney general's office and he would not be surprised if someone tried to amend his bill to say that.

The Louisiana Oil Marketers and Convenience Store Association, which represents most gas station owners and gasoline middlemen in the state, favors laws that prevent large, deep-pocketed retailers or oil companies from pricing gas below costs for the purpose of driving competitors out of business. The group is solidly behind the existing law and supported Odom's attempt to enforce it, even though gas prices are at historic highs.

The group issued a statement saying it is "in the process of reviewing all legislation being filed for the upcoming session." It did not mention the Daniel bill, and a spokeswoman did not return phone calls to the Times-Picayune.

Daniel said the Unfair Sales law is randomly enforced and was created at a time when monopolistic activity in the retail gas market was a greater danger than it is today.

"It's time that we get the law off the books," Daniel said.

The current law is too complicated both for the retailers and the regulators to follow, he said. The definitions of wholesale, retail and markup, among other terms, are confusing, as is the required record-keeping, he said.

His proposal, House Bill 183, would greatly simplify what stations can do and what records they must keep, Daniel said.

Though there is a good argument for repealing the entire Unfair Sales Act, he said, the bill applies only to the portion that covers gas stations. Daniel said he was concerned a complete repeal might have ramifications beyond what he can anticipate and decided to limit his bill to gasoline pricing.

He said he has filed similar bills in past years with no luck but thought the time was ripe because of the high prices at the pump and public attention drawn to the issue.