STAMFORD, Conn. -- Even as state lawmakers in Connecticut seek more details about an industry-financed study on gasoline pricing by a trio of Quinnipiac University professors, an industry association leader is calling the study flawed and based on misinformation.
"It never ceases to amaze me what the major oil companies will do or say to continue gouging consumers in this state, where they still control the marketplace," Michael J. Fox, executive director of the Gasoline & Automotive Service Dealers of America, wrote in a note to CSP Daily News. "[image-nocss] They hired three economics professors from Quinnipiac University to report that zone pricing is good for consumers because it results in 'fairer and lower' average prices at the pump. How convenient."
The Connecticut legislature's General Law Committee recently killed legislation that would have banned zone pricing, according to a report from the Associated Press. A $40,000 study financed by the American Petroleum Institute in Washington, D.C., and conducted by the three Quinnipiac professors said a ban on zone pricing would, for the most part, increase prices everywhere in Connecticut except in lower Fairfield County, according to the AP report.
Since then, State Sen. Sam Caligiuri called on industry lobbyists to make public the information used in the study. The professors who conducted the study said they have destroyed the information and industry lobbyists would not release it.
"Releasing the data would only help corroborate the reliability of the study," Caligiuri said. "It's in the industry's interest to release it."
Supporters of a ban on price zoning say they will find a way to enact it as an amendment to different legislation. Critics of price zoning, such as Fox, say it drives up costs for consumers by blunting competition with arbitrarily set prices.
While it is true that stations do not have to lower prices [if zone pricing were banned], anybody in the industry understands that consumers' demand for lower prices drives station volume, he wrote. Volume is all important to a retailer as it generates store traffic. Now I have one simply question: In what state has zone pricing been banned so the Quinnipiac three could study the effect of this ban? The answer [is] nowhere. That's because Big Oil keeps misleading legislators.
To read Fox's complete comments, click the Download Now" button below.
Regarding access to the information used in the study, Steve Guveyan, executive director of the Connecticut Petroleum Institute, a branch of the American Petroleum Institute, said told AP the professors used proprietary information. Oil companies that participated in the study will not allow it to be made public because it could reveal pricing policy to competitors, he said.
When the Quinnipiac professors were commissioned, they were asked to try to find studies that support a zone pricing ban and they could not, Guveyan said. One of the professors stands by his conclusions but said he understand why lawmakers are demanding the data.
"If I were sitting there watching this and I heard someone said they had deleted all the data, I wouldn't blame them for being suspicious," said Christopher Ball, assistant professor of economics at Quinnipiac.
Destroying proprietary information after a study is common, he said. "At the end of the process, we have to give it all back because it's not ours to keep," he said.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.