MADRID, N.Y. -- The New York State attorney general's office recently fined 15 gas stations across the state a total of $63,000 for alleged price gouging after Hurricane Katrina. According to a report by The Central New York Business Journal, the move has left one St. Lawrence County station owner feeling caught up in circumstances beyond his control.
Wayne Taillon told the newspaper that he has operated Wayne's Gas & Service in Madrid, N.Y., for six years without problem. It wasn't until after Katrina that the state found fault with his pricing [image-nocss] policy and fined him $2,000, he said.
He said that during the mid-morning of Friday, September 2, he placed an order for a fuel delivery to be made later that day. His supplier, Griffith Energy of Rochester, quoted him a price of $3.6755 per gallon for regular unleaded gasoline, and Taillon raised his price at the pumps from $3.259 to $3.799 to reflect the higher cost. Griffith Energy never made the delivery that Friday as promised, Taillon said; however, because he expected the delivery to be made at some point over the weekend, Taillon said he kept his prices set at $3.799 for regular unleaded gasoline.
That is where Taillon went wrong, according to the report, citing Paul Larrabee, a spokesperson in the office of AG Eliot Spitzer. Taillon should not have charged the higher price on the fuel already in his tank, for which he paid $3.159, Larrabee told the paper.
Taillon said he has always set his prices this way and has no plans to change that practice. He added that most station owners he knows set their prices the same way, changing them to reflect the current supplier prices when a delivery is expected, even if it has not been made yet.
In the five days leading up to the price flap, Taillon said he sold an average of 1,692 gallons of gasoline daily. In the six days following, sales dropped to an average of 728 gallons daily. He received a fuel shipment on September 3 for $3.3855 per gallon, which was less than the $3.6755 originally quoted. Taillon said he believed he was being charged the quoted price. That Monday, September 5, Taillon finally was able to speak with his supplier and discovered it had held off on delivering his fuel because the price started dropping and it wanted to give him a better price. Taillon said he then changed his prices to accurately reflect the price he was charged by Griffith.
By then the damage was already done, the report said. Someone had complained specifically about Wayne's Gas & Service to the AG's officeone of 80 specific complaints received, Larrabee said.
On the sixth of September 6, we sent a letter to those 80 stations, he says. The letters asked station owners to provide the prices at which the lowest grade of gas was sold on every day from August 1 to September 6, the prices paid to their suppliers for all gas purchased between July 1 and September 6, and copies of all invoices for gas purchased. With that information we were able to step back and take a look at the way the business behaved over a period of time, Larrabee said.
And in 15 cases, the AG's office found excessive price markups above and beyond what was necessary to cover increased supply costs, he told the paper.
That is where Taillon got into trouble, said the report, despite a letter sent from his supplier to the AG's office corroborating his story about the delayed delivery and quoted price. We told him we waited the extra day because the market price had fallen by a large amount on Friday, and we wanted to get him the gas at a cheaper price, read the letter, a copy of which was provided to The Central New York Business Journal and signed by Paul Tandlmayer, director of sales at Griffith Energy. Since my department doesn't work Saturday or Sunday, the first time Wayne would have known he was getting billed $3.3855/gallon for the delivery and not $3.6755/gallon would have been Monday morning, Sept. 5, 2005.
Taillon retained Canton attorney James Monroe and ultimately got his fine reduced from the original $3,700 to $2,000, the report said, but he still believes he was penalized for something out of his control. I feel like I'm just a victim of circumstances, Taillon told the paper.
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