RALEIGH, N.C. -- Owners of three more gas stations must turn over information as part of North Carolina attorney general Roy Cooper's ongoing investigation into possible price gouging at the pump. Cooper's Consumer Protection Division has issued subpoenas to the owners of three more gas stations, one in Charlotte and two in Yadkinville. The stations reportedly charged between $4.49 and $5.35 per gallon.
The subpoenas went out to Sheriffs' Offices to be served on the gas stations' owners. Retailers have 10 days to provide documentation to the Attorney General's Office including information [image-nocss] on their costs.
Last week, Cooper's office sent subpoenas to owners of 23 gas stations who reportedly sold gasoline for more than $5.35. Those stations are located in Anson, Ashe, Buncombe, Cherokee, Craven, Cumberland, Guilford, Iredell, McDowell, Montgomery, Stanley, Transylvania and Yadkin counties.
The price gouging law, which Cooper helped strengthen in 2006, applies to all levels of the supply chain. "Our price gouging law gives us the tools to go after retailers, distributors or wholesalers if they try to run up prices unfairly during a time of disruption," Cooper said. "The law also serves as a deterrent to price gouging through out the supply chain."
Price gouging—or charging unreasonably excessive prices in times of crisis—violates North Carolina General Statute 75-38, when a disaster, an emergency or an abnormal market disruption for critical goods and services is declared or proclaimed by the governor. On Friday, North Carolina's law against price gouging was triggered by the declaration of an abnormal market disruption due to Hurricane Ike.
Cooper's office has received more than 4,300 reports of possible gasoline price gouging from consumers since September 12.
Meanwhile, in Virginia, Delegate Ward Armstrong (D) announced Monday that he will sponsor legislation in the 2009 General Assembly session aimed at helping the state investigate complaints of gasoline price gouging following disasters, reported The Martinsville Bulletin.
The bill aims to strengthen the Virginia Post-Disaster Anti-Price Gouging Act by letting the state Department of Agriculture & Consumer Services probe "oil companies suspected of selling goods [gasoline] at unconscionable prices in Virginia during a state of emergency," according to the newspaper, citing a release. Currently, the state can investigate only gasoline retailers for possible price gouging, "and I don't think it's fair," Armstrong told the paper by phone from Richmond.
Also, the bill would allow state officials to investigate whenever a shortage of commodities in Virginia results from a disaster anywhere in the nation and the president has declared a state of emergency related to the disaster.
Gasoline prices rose significantly within 48 hours to 72 hours after Hurricane Ike hit the Texas coast, and it seemed that Southside was "harder hit than other areas of the state," said Armstrong. In the Henry County-Martinsville area, he said, "the price of gasoline jumped 50 cents or more a gallon before Ike even hit and before we knew if there would be any damage to the oil rigs or refineries in the Gulf" of Mexico.
Gasoline prices increased at the same time the price of oil dropped below $100 per barrel for the first time in weeks, he pointed out.
Based on information he has gathered, Armstrong said he thinks the rise in gasoline prices largely was due to price increases imposed on gas stations by oil companies, as well as "spot marketers" that buy gasoline from those companies and then sell it to stations. "Most retailers must pass along their increased costs to consumers," he said, "so if the oil companies are gouging, everyone down the line suffers."
He added, "I don't think the Virginia...retailers are the problem."
The Anti-Price Gouging Act was enacted in 2004. Following a declared state of emergency in Virginia, the act prohibits suppliers from charging outrageous prices for necessary goods and services within the affected area for 30 days. The term "necessary goods and services" refers to ones for which demand obviously will increase, or is expected to increase, as a result of the disaster. Examples listed in a state agriculture department document include water, food, power generators, batteries, tree removal services and home repair materials and services. Legislation enacted in 2006 added gasoline to the list, said the report.
The basic test for determining if a price is too high, the document states, is whether the post-disaster price charged by a supplier for a necessary good or service grossly exceeds the price charged for the same or similar goods or services, either by the same supplier or within the same trade area during the 10 days immediately before the disaster.
Violations of the Anti-Price Gouging Act are punishable through the state's Consumer Protection Act. But under the legislation, people cannot sue other people or businesses. Any enforcement or legal actions can be imposed only by a government agency.
Armstrong said he understands the state agriculture department is probing more than 2,500 complaints of price gouging among gasoline retailers.
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