Courtesy of Marginal Revolution comes a pointer to the fact that Minnesota’s Commerce Department is fining gas stations for selling gas too cheaply. According to state law, gas stations cannot sell gas without taking a minimum profit, about eight cents per gallon at this time. Murphy Oil apparently broke the law at its ten stations, all of which are located in Wal-Mart stores.
It isn’t clear from the article why the magic number is eight cents, but it seems unreasonable to treat gasoline any different than any other product in this situation. Stores use products like milk, bread, and eggs as loss leaders to bring people into the store. Why not gasoline?