The Bismarck Tribune - Wal-Mart is the target of some legislators who want to prevent the retail giant from selling gas below cost just to get customers into its stores.
Russ Hanson, president of the North Dakota Retail Petroleum Marketers Association, said gas station owners across the state are worried about Wal-Mart driving them out of business.
"We don't want to single out just Wal-Mart, but we know they are coming here," Hanson said.
Wal-Mart is building larger stores across the state, including two supercenters and a Sam's Club in Bismarck.
Senate Bill 2389, spearhead by gas retailers, would allow a business to be sued for selling gas below cost.
Wal-Mart really has the right idea about this sort of thing.
Nate Hurst, public and government relations manager for Wal-Mart, said laws regulating gas prices hurt the consumer.
"States like North Dakota that are trying to enact laws are doing so to protect profits for special interest groups," Hurst said. "We don't feel that the customers need protection from lower prices."
Exactly. Free enterprise should control prices. They certainly shouldn't be propped up by legislators looking to create a "fair" market environment. If legislators are truly interested in a fair market they should protect the citizens from this kind of price fixing.
Really, how much of an impact can Wal-Mart have? The whole idea behind Wal-Mart selling gas below cost is that they'll recoup the loss in increased sales in their stores. Bearing that in mind, how many gas locations will Wal-Mart have in a community? Likely the same number as they have stores.
Selling gasoline is a location-intensive game. People are often willing to pay a few more cents per gallon if it means they don't have to travel across town to fill up. This tells me that gas stations around the Wal-Mart stores might be hurt by the competition but other gas stations with convenient locations aren't likely to feel much of a pinch.
And lets not forget that these gas station owners are the same people who crank up the price of fuel any time there's a blip in the market or the whiff of trouble with oil supplies. I still remember when 90% of the gas stations in my hometown raised prices by a dollar or more per gallon shortly after the 9/11 attacks. I have a hard time feeling sorry for these people.
The increased competition from Wal-Mart will no doubt be hard on some gas stations, but it the impact isn't likely to be the dire forecast being pushed by the petroleum retailer groups. I say let Wal-Mart come in and compete. It will be better for shoppers and better for the overall economy.
(via Dakota Pundit)