Leibowitz said his agency would look into possible zone pricing schemes or collusion, and will examine why gasoline prices did not fall as [image-nocss] fast as they did across the rest of New York state. He pledged to conclude the inquiry as soon as possible and to work to find a way to make the findings public.
As gasoline prices fell across the country late last year, western New York's gas prices remained inexplicably high, they said. But a Higgins-prompted investigation by the former FTC under the Bush administration produced no reasons or solutions for the problem, they claimed, and was not made open to the public. In a personal meeting with the new FTC commissioner, Schumer and Higgins demanded a quick, public and more comprehensive investigation.
"The stonewalling we received from the previous administration was unacceptable," said Schumer. "The bottom line is that western New Yorkers were paying too much for gas for too long and we must know why. After this meeting I am confident the FTC will take this issue more seriously and will do what is necessary to prevent western New York from being again slammed with unnecessarily high gas prices. The meeting was positive and productive, and I will continue working with the Chairman Leibowitz and Congressman Higgins to ensure that this moves as quickly as possible."
Higgins said, "Last fall, western New Yorkers were paying unjustifiably high gas prices and despite repeated requests local consumers were left with no explanation. The Jamestown and Buffalo regions were among the top five most profitable for gas retailers in the nation which FTC officials confirmed were 'out of bounds.' Under the new leadership of FTC Chairman Jon Leibowitz, appointed just days ago, and with the strong support of Senator Chuck Schumer, I am more confident than ever that local residents will receive the answers they deserve so we can prevent potential future disparities."
In late October of 2008, gasoline prices across the country and across New York State began to dramatically drop, but western New York's prices remained high. On Oct. 21, 2008, the average retail price of gasoline in the Buffalo area, $3.40 per gallon, was 8 cents more than the nearby community of Rochester, and 36 cents and 38 cents more than the upstate communities of Syracuse and Albany, respectively. At that time, Rochester had experienced a nearly 14% drop in gasoline prices, and Albany's prices had dropped 19%, but Buffalo's had only dropped 12.7%.
The fuel price disparity persisted through the end of December. The average retail price of gasoline in the Buffalo area on Dec. 21, 2008, was $2.04 gallon. That was 6 cents more than Rochester, and 13 cents and 9 cents more than Syracuse and Albany, respectively. The national average price of gasoline at that time was $1.66.
While the price of gasoline in Buffalo is now more in line with the national and statewide average, it still remains high and the reason for the price disparity has not been identified.
In an effort to prevent future disparities in western New York, they said, Schumer and Higgins pressed the new chairman of the FTC for a quick, comprehensive, public study. Schumer and Higgins pressed for four actions:
A quicker investigation. The study has been dragging on for too long while western New Yorkers continued to suffer at the pump and still do not have the reasons or remedies for the disparity. A public report. The report should be made public and the findings should be in writing. A detailed report. The report should contain detailed findings, including data on the pricing anomalies, the reasons for the higher-than-expected gasoline prices in western New York, the factors contributing to the unusually high prices, and who was responsible for the high prices. Possible actions and remedies. The report should propose possible actions and remedies to fix the price disparity problem.
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