PIERRE, S.D. (AP) — A bill allowing the continued sale of 85-octane gasoline in western South Dakota sped through a legislative committee Wednesday after a compromise was reached on how the fuel would be described in labels placed on pumps.
A state agency rule that has temporarily allowed the sale of 85-octane in nine western South Dakota counties requires that a warning label placed on pumps call it "Sub-Regular Octane."
The House Commerce Committee unanimously approved a version of the bill that would permanently allow the sale of the low-octane fuel in those nine counties, with a warning label that reads: "May not be suitable for all engines. Refer to owner's manual before fueling." The 85-octane fuel would simply be called regular unleaded.
Fuel sold elsewhere in South Dakota would have to be at least 87-octane.
Rep. Justin Cronin, R-Gettysburg, said he had expected a contentious hearing, but state officials and fuel industry representatives reached a compromise Tuesday night that still accomplishes Gov. Dennis Daugaard's goals of avoiding fuel shortages in western South Dakota while also making sure people know what they are buying when they pump 85-octane fuel.
Octane is a measure of fuel performance, with a higher level indicating better performance. Most car manufacturers recommend that gasoline used in vehicles have a minimum octane rating of 87. State and industry officials said 85-octane gasoline is generally intended for use in high-altitude regions such as the Rocky Mountains.
During an investigation into allegations that some stations were selling 85-octane fuel mislabeled as higher octane gasoline, South Dakota's Public Safety Department last year discovered that state law technically prohibits the sale of 85-octane gasoline.
The department then passed rules temporarily allowing the sale of the low-octane fuel legal to avoid a possible fuel shortage during the summer tourism season in the Black Hills and the rest of western South Dakota, where 85-octane fuel has been sold for decades.
The bill approved Wednesday would allow the sale of 85-octane gas in Butte, Custer, Fall River, Harding, Lawrence, Meade, Pennington, Perkins and Shannon counties. The measure next goes to the full House.
Fuel industry executives said they need to continue selling 85-octane fuel because they depend on refineries in Rocky Mountain states that produce the low-octane fuel.
Western South Dakota gas stations would sometimes run out of fuel if they could not sell 85-octane fuel, said Dave Kulish, general manager of M.G. Oil Co., which is based in Rapid City.
Kulish said about 25-35 percent of the fuel his company sells is 85-octane, but the warning label calling it sub-regular has cut sales by about 5 percent.
"It was a hazard label. It was something people were scared of," Kulish said.
He said the bill will allow pumps to label 85-octane fuel as regular unleaded in order to maintain contract requirements with suppliers on what goes on pumps.
Kulish said 85-octane gasoline has been sold in western South Dakota for decades without causing problems with vehicle engines.
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