MERRILL, Wis. – To combat rising gasoline prices, a Wisconsin retailer made an attractive offer: Save 3 cents on each gallon and support local youth sports at the same time. Senior citizens also paid less for gasoline, saving 2 cents a gallon.

Then the state stepped in. The Department of Agriculture, Trade and Consumer Protection informed BP owner Raj Bhandari his discounts were too good to be legal. Bhandari told the Wausau Daily Herald he was unaware the offers violated Wisconsin’s Unfair Sales Act, which requires retailers to sell gasoline for about 9.2 percent above the wholesale price.

Retailers learned of the law in December 2003. Bhandari has owned the store since May 2006. He received a letter in April from a state auditor saying the cash discounts he offered put his fuel prices too far below the state’s minimum markup. “In our case, it’s cutting the state margin,” Bhandari said to the newspaper.

He ended the discounts but fears customers think he halted the offers to make more money. Bhandari could be sued by the state if he continued the discounts, he said. A state penalty would be assessed for each gallon discounted, with the amount decided by a judge.

One of Bhandari’s customers has contacted his state representative asking him to change the law so locally owned retailers could offer discounts when it benefits schools. At grocery stores, food vendors fund gasoline discounts.