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North Carolina Bill Would Let Stations Buy Gas From Competitors

RALEIGH, N.C. -- A bill designed to protect service stations from competitors who sell below-cost gasoline cleared a North Carolina State Senate committee with both station owners and other disgruntled merchants, reported the Associated Press.

Last year, the House agreed to set a benchmark price for gasoline, using a formula that takes into account the lowest price at which wholesalers can purchase gasoline from terminals, plus freight and taxes. Several groups, including the Federal Trade Commission, complained the formula would discourage competition and could force outlets to raise prices.

The bill has been sitting in the Senate ever since. A replacement proposal, agreed to by members of a judiciary panel, instead would allow any business to purchase gasoline a competitor is selling below cost by driving a tanker up to the outlet and pumping it out of the tanks.

At the very least, that would allow smaller stations to sell the cheaper gas themselves, said Gary Harris of the North Carolina Petroleum Marketers Association. However, Harris noted that the revised bill still doesn't solve the problem of allowing mom-and-pop stations to compete fairly with discount chains.

The North Carolina Retail Merchants Association said the Senate's proposal would hurt discount stores because competitors could siphon up all of their gas with only a few trucks.

Discount retailers shouldn't be penalized if they sell gas at a loss so people will come inside their store to buy other products, the association said, arguing that such behavior is not considered predatory pricing.

"This is really an anti-consumer bill," said Fran Preston, the association's executive director. "It will come right in and drain us dry."

The measure, which now goes to the full Senate for consideration, would also create a legislative study commission to examine gasoline pricing issues and report back next year.
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