Monday, June 10, 2013

Local Gasoline Pricing



Free Market In Wilmington?

The manager of a Wilmington station, who shall remain anonymous, describes the method of local gasoline price setting. “Each day I am required to check prices at other stations and report them to corporate headquarters who, in turn, tell me the price for the day."
In my opinion a competitive market means that one station would lower prices in order to increase volume of sales and entice customers to spend on convenience store purchases.
Sample: A two cents per gallon profit on 100 gallons equals $2.00. A one-cent profit on 300 gallons equals $3.00. Equal wholesale prices are assumed and loss leader store discounts not factored.
Maybe Ohio should look to Michigan for guidance.


Michigan-Successfully-Prosecutes
Congratulations are in order for the Michigan Attorney General's office, which earlier this year successfully prosecuted five cases of retail gasoline price fixing. 

Stations investigated and prosecuted for price-fixing were all located within two miles of each other in Madison Heights. An investigation by District Attorney Bill Schuette's office determined that five stations were setting their prices at an artificial level, within a penny or two of each other. The scheme, which violates Michigan's antitrust law, was an attempt to increase profits from gasoline sales by eliminating competition in the Madison Heights area.

Schuette's office began the investigation after a tip from another gas staton owner revealed that he was pressured to participate in the price-fixing operation. The investigation showed that the stations all set their prices in relation to each other on five occasions last February and March.
Michigan's Antitrust Reform Act (MARA) prohibits price-fixing agreements because they undermine competitive market forces and casue artificially higher prices for consumers. 
Here are the gas stations that pleaded guilty in the 6th Circuit Court to violating Michigan's Antitrust Act: 
Read more at http://blog.gasbuddy.com/posts/Michigan-Successfully-Prosecutes-Gasoline-Price-Fixing/1715-486180-837.aspx#TEu7LBEUq7ktDDP5.99

No comments:

Post a Comment