SCHAGHTICOKE, N.Y. -- A state Supreme Court judge has ruled that a Rensselaer County, N.Y., gas station improperly used Hurricane Katrina as a reason to raise its fuel prices last year, said the Associated Press. The station will have to pay $4,500 in penalties and costs.
The decision came after state Attorney General Eliot Spitzer sued the Schaghticoke Mobil station and two others in April.
Albany County Supreme Justice Joseph Teresi ruled that Mechanicsville, N.Y.-based Wever Petroleum Inc. used the leverage provided by the [image-nocss] market disruption to extract a higher price. The judge found that the station's normal price markup before the hurricane was 87 cents a gallon. That rose as high as $1.43 a gallon after the storm. According to the decision, however, the price paid by the station only rose as much as 67 cents a gallon.
The station claimed it raised prices only because its supplier did.
In a press statement, Spitzer hailed the court decision that he said strengthens the ability of the state to pursue gasoline price gouging cases.
State law prohibits the sale of vital consumer goods at an unconscionably excessive price during natural disasters. The law says that a price may be considered excessive if there is a gross disparity between the prices charged immediately before and after the emergency, and the disparity is not attributable to higher costs imposed upon the seller.
This case is ground breaking because it established two important principles: First, the declaration of state of emergency in New York is not required to enforce the state's price gouging laws. Second, the calamity causing the market disruption need not occur locally. It may occur in another state located hundreds or even thousands of miles away, said Spitzer.
The cases against the two remaining gas stations are pending.
Click here to read the Wever decision.
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