New Jersey Assembly Bill A5523

New Jersey 2022-2023 Regular Session

• Introduced: 6/5/23
• Refer: 6/5/23

Caption

Requires certain wholesale pricing of motor fuels be set using formula.

Impact

The implications of A5523 are significant for the existing laws under the 'Unfair Motor Fuels Practices Act,' particularly by creating clear expectations for pricing agreements between wholesale entities and retail dealers. This legislative change seeks to protect retail dealers from potential exploitation through inflated pricing strategies that do not reflect fair market practices. By requiring a negotiated formula, the law aims to encourage more equitable transactions while setting a defined limit on pricing that could be seen as advantageous for retailers and consumers alike.

Summary

Assembly Bill A5523 introduces a regulatory framework concerning the wholesale pricing of motor fuels in New Jersey. The bill mandates that distributors, refiners, wholesalers, or suppliers must set a 'tank wagon price' for retail dealers using a formula that has been mutually negotiated. This price is limited to not exceeding five cents per gallon above the listed terminal price for the product at the time of purchase. The introduction of this bill aims to enhance fairness and transparency in fuel pricing dealings, which could potentially stabilize the market for fuel retailing.

Conclusion

In conclusion, while A5523 strives to create a more structured and fair pricing environment for motor fuels, it also raises questions about its comprehensive applicability and the implications of its exemptions. The success of this bill will hinge on its implementation and the adherence of all parties involved to the negotiated pricing structures it establishes.

Contention

Notable points of contention regarding the bill include the exemptions it grants; the provisions do not apply if a retail dealer owns the property their station is located on or if they lease from non-wholesale entities. Opponents of the bill may argue that these exceptions could create loopholes that disadvantage certain retailers and undermine the intent of the legislation. Additionally, the penalties for violations, which include a fine of $5,000 per delivery of improperly priced fuel, may raise concerns among wholesalers and refiners about the potential financial impact on their operations.