Milwaukee Journal No fueling: Rivals spar over gas

Merchant protests lower prices by filling huge tanker

By JEANETTE HURT and LARRY SANDLER of the Journal Sentinel staff

Last Updated: May 1, 2001

Burlington - When Ed Trudeau, a 35-year veteran of the gas station business, found two stations he thought weren't playing by the rules, he made his point Tuesday with an 8,500-gallon tanker truck.

Trudeau and his son-in-law directed the tanker to one of the rival stations to fill it with cheap gasoline - and deliver the message that in the heat of rising gasoline prices, a chain station should not be able to get away with undercutting him by 15 cents or more a gallon.

"The bottom line is, we just want them to obey the law," Trudeau said.

Trudeau is co-owner of the Vista Gas Station on Milwaukee Ave. with his daughter, Wendy Johnson, and her husband, John Johnson, where unleaded was selling for $1.85 a gallon Tuesday, 2 cents above their cost to buy.

Down the street at the Citgo Station, unleaded regular gasoline was selling for $1.69 a gallon. Trudeau's point: "I can buy gas from him cheaper than from my oil suppliers."

After checking on the legalities, Trudeau summoned a truck from Zenith Transportation Corp. and directed driver Jim Rathmann to pull his tanker into the Citgo's first row of pumps. Rathmann and Jon Johnson scrambled on top of the tanker while Trudeau primed the pump and started the flow of fuel into the tank.

After about five minutes, two clerks walked out of the station and asked Trudeau what he was doing.

"Where are you taking this?" asked one clerk.

"It doesn't matter," Trudeau told her.

"If it's going to another gas station, it's illegal," she countered.

Trudeau shook his head.

"Dear, we've already done our homework," he said. "We know what we're doing is legal."

"You don't have to have an attitude with me, buddy," she snapped.

The pumps were quickly shut down.

Trudeau decided that he was being discriminated against, so he sent Johnson to get the police.

"This is where it gets interesting," Trudeau said, raising his eyebrows, as Burlington police Sgt. Scott Molitor and Officer Dave Krupp pulled up.

After listening to Trudeau's pleas, Molitor told him he had to leave.

"They don't have to sell you gas," Molitor said. "This is a private business."

Without another grumble, Trudeau went inside to pay $427.53 on his MasterCard for 342.58 gallons of gasoline.

Yet Trudeau's protest worked.

While he was inside paying his bill, two station employees were outside removing the numbers from the sign and raising the price to $1.77 a gallon.

Trudeau shook his head and laughed.

"They're still not legal, but we accomplished part of what we set out to do," Trudeau said. "We did get his attention, though."

Wisconsin's minimum markup law requires gasoline stations to charge 6% above invoice price or 9.18% above the average price at wholesale terminals, whichever is more. Stations can charge less to match a competitor's prices.

The markup law, which dates to the 1930s, was intended to prevent stations owned by massive multinational oil companies from slashing prices below cost to drive their mom-and-pop competitors out of business. Questions about the law's value have increased as prices have risen. But a spokesman for Wisconsin stations says the law is needed now more than ever.

"In these volatile times . . . we want keen competition to keep prices as low as possible, and this law helps keep more competitors in the marketplace, which is good for the consumer," said Bob Bartlett, executive director of the Petroleum Marketers Association of Wisconsin and Wisconsin Association of Convenience Stores.

Without the markup law, prices might go down temporarily, but once the big oil companies eliminated their smaller competitors, they would be free to raise prices again, Bartlett said.

Tuesday's faceoff in Burlington wasn't the first clash over the law. Last year, three Sturtevant station owners exchanged harsh words until one raised his prices to match the other two.

But Trudeau wasn't through yet.

After making a quick stop to unload the fuel at the Vista station, Trudeau directed the tanker back on the road to the local Clark Station, which also boasted a price of $1.69.9.

Trudeau unhooked the pumps while Rathmann and Johnson hiked to the top of the tanker again.

But the clerk at the Clark Station had been forewarned.

The Clark Station clerk called the Burlington police. Both Krupp and Molitor responded to the call.

"I have to ask you to leave," Krupp said to Trudeau after speaking briefly to the clerk.

Trudeau walked away without too much complaint. "We do feel we were discriminated against," Trudeau said.

Krupp said, "I can't arrest them for discrimination."

Trudeau said he was going to talk with his lawyers today, and he also planned to make a call to the Racine County district attorney's office.

"I'll compete with anyone as long as it's fair," Trudeau said. "If the state won't come in and make sure the playing field's level, you have to take action."

The price in Burlington contrasted with Tuesday's areawide average of $1.85 a gallon for regular gasoline at self-service pumps, up a penny from Monday, according to an informal Journal Sentinel survey of 10 stations. Statewide, the average stood at $1.77, up 2 cents from Monday and up 29 cents from a month ago, AAA Wisconsin reported.

Meanwhile, in Washington, D.C., several House members from Wisconsin met and agreed to write to EPA chief Christie Whitman asking her for more flexibility in rules pertaining to cleaner-burning, summer-blend gasoline.

Tom Barrett, a House Democrat from Milwaukee, said he attended the session with Jerry Kleczka, another Milwaukee Democrat, and Republicans F. James Sensenbrenner Jr. from Menomonee Falls, Paul Ryan from Janesville, Mark Green from Green Bay and Tom Petri from Fond du Lac.

Barrett said the members concurred that more flexibility was needed in light of a refinery going out of business in Blue Island, Ill., and another, the Tosco Corp. plant in Illinois, reducing production for a week or two because of a fire.

Katherine M. Skiba of the Journal Sentinel staff contributed to this report.

-- Anonymous, May 02, 2001