Gasoline discounts for cash customers may be spreading

By John O'Brien | Jul 14, 2008


PROVIDENCE, R.I. (Legal Newsline) - Rhode Island Attorney General Patrick Lynch joined one of his colleagues Monday in recommending discounts for those who pay for gasoline with cash.

The opinion he issued to the state's Department of Business Regulation follows in the spirit of Connecticut Attorney General Richard Blumenthal's successfully proposed legislation that takes into account credit card charges on gasoline purchases.

"In these times of skyrocketing costs on every front and especially in costs associated with basic necessities such as fuel, food, utilities and housing, it's incumbent on the public and private sectors to address the hardships inflicted on our state's residents by these tough economic times," Lynch said.

DBR legal counsel Richard Berstein asked Lynch if state law prohibited gas stations from charging two separate prices for the same product.

"Because my office has found nothing in these statutes to rule out the practice of dual pricing, this can be a win-win situation," Lynch said.

"It's advantageous for gas station owners to lower the cost for customers paying with cash, and it's beneficial to the customers who can pay for their gas with cash."

Lynch added that the price of credit card transactions can amount to more than 10 cents per gallon.

Blumenthal wrote his opinion to Gov. Jodi Rell, who wondered if language contained in franchise agreements lawfully barred franchisees from offering the cash discount. It helped push through a bill during June's special session.

"Legislation requiring gasoline retailers in this state to offer a cash discount or banning franchise agreement provisions prohibiting franchisees from offering cash discounts would not be prohibited by federal law, including the PMPA or federal octane rating posting regulations," Blumenthal said.

"Such legislation should be upheld as well against any challenge under the Contracts Clause or the Interstate Commerce Clause of the United States Constitution."

From Legal Newsline: Reach John O'Brien by e-mail at john@legalnewsline.com.

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