Requires certain wholesale pricing of motor fuels be set using formula.
Impact
If enacted, S352 will modify the existing framework governed by the Unfair Motor Fuels Practices Act. The bill will directly affect how contracts are negotiated between fuel suppliers and retail dealers, imposing specific rules that must be adhered to in future contracts. It is intended to create transparency in pricing and establish a predictable financial environment for retail dealers, ultimately aimed at promoting fair competition in the marketplace.
Summary
Senate Bill S352 aims to regulate the pricing structure of motor fuels sold to retail dealers in New Jersey. The bill stipulates that distributors, refiners, wholesalers, or suppliers cannot charge a 'tank wagon price' to a retail dealer unless the charge is based on a negotiated and agreed-upon formula. Additionally, this price cannot exceed five cents per gallon above the list price at the distribution terminal at the time of purchase. This regulatory measure seeks to provide a fair pricing mechanism and protect retail dealers from potential overcharging practices.
Contention
The bill includes exemptions, such as not applying to retail dealers who own the property their station is located on or to contracts in existence prior to the act's effective date. This may raise concerns among various stakeholders, including local retailers who might feel disadvantaged by the new regulations as they could potentially lead to increased costs in negotiations if they do not qualify for these exemptions. Critics may argue that while the intentions behind the bill are positive, the regulations could impose unintended burdens on smaller retailers who may lack negotiation power against larger wholesalers.