Gas-pricing controls are urged

? Owners of small convenience stores told a House committee Tuesday that predatory gasoline pricing is endangering the fabric of rural Kansas life.

But opponents of a bill to forbid retailers from selling gas and diesel fuel below their cost said prices should be determined by the market, not by state government.

In written testimony to the House Commerce and Labor Committee, the Kansas Chamber of Commerce and Industry said federal antitrust law is adequate to prevent predatory pricing.

“Government intervention in setting a minimum price for gasoline is intrusive and anticompetitive,” the chamber said.

Supporters of the bill said state action is necessary for small vendors to withstand low-price competition from large retailers, such as Wal-Mart.

Lori Milke of Hays, who owns convenience stores in Victoria, Ellis and LaCrosse, said some residents have come to her stores for years. She noted that she supports community projects such as school reading programs and soup suppers, church fund-raisers and softball and bowling teams.

The measure would fine a business $5,000 per violation for selling gasoline below its invoice cost, including fees and state and federal taxes. The bill also would make it illegal for gas stations to post prices, either on signs or at the pump, that are lower than their invoice cost.

However, retailers could still offer temporary promotional discounts or discounts for using a special credit or shopping card.

Milke said that when big competitors are selling gasoline for less than what she pays wholesale, it drains business from her.

“People tell me, ‘Get lean, cut corners, gotta get competitive,”‘ Milke said. “I can assure you my corners are cut. Somehow my employees don’t want to work for free; the insurance company wants to be compensated for their coverage; all my different suppliers, they want paid.”

Tom Palace, executive director of the Petroleum Marketers and Convenience Store Association of Kansas, said large retailers sell fuel below cost in hopes of eliminating competition.

“The evolution of the big-box retailers or discount retailers is taking its toll on the small independent gas station marketer that has served his community for years,” Palace said.

Wal-Mart spokesman Dan Fogleman said Wal-Mart believes customers have a right to cheap gas.

“We feel that competition is the best way to ensure the lowest possible price for consumers,” he said. “States enacting laws like this are doing so for interest groups that don’t want competition.”