OAK BROOK, Ill. -- A CSP Daily News poll earlier this week asked, "Do you think the concern about gasoline price gouging will sustain its current momentum?" Of the nearly 225 respondents, 36% said "it is already dropping off"; 27% said "for a while, then it will drop off"; 21.5% said "yes"; and 15.5% said "no." But for now, gouging continues to make news around the country, driven still by the last year's hurricanes. The latest headlines come from New Jersey, New York, Georgia and Alabama.
In Newark, N.J., BP Products North America Inc. has agreed to [image-nocss] pay $315,000 and has entered into a settlement with the Attorney General's Office regarding the company's adherence to state gasoline pricing laws.
The parties would not say what specific allegations prompted the settlement, just that the paymenta portion of which will be used for consumer initiativeswas being made to "avoid the costs, expenses, distractions, risks and delays of protracted litigation," according to New Jersey Consumer Affairs Director Kimberly Ricketts.
BP entered into the agreement on behalf of its 21 company-owned and -operated and 64 commissioned agent gas stations in New Jersey without admitting any wrongdoing.
The settlement arises from station inspections conducted by the State Office of Weights & Measures, as well as county and municipal inspectors, on or about Labor Day. BP Products voluntarily cooperated with the investigation. "This settlement was a direct result of BP Products coming to the table to do the right thing," Governor Richard Codey said.
According to the Philadelphia Inquirer, the state in September sued Amerada Hess, Motiva, Sunoco and independent retailers for allegedly illegally increasing prices due to Hurricane Katrina. Stations are only allowed to change their prices, and post them, once a day in New Jersey. But in the unsettled period before and after the storm, some stations were increasing prices throughout the day, said the report.
Consumers lodged complaints about unfair practices at stations as prices rose sharply ahead of the storm. State, local and county inspectors examined conduct at the stations in a sweep that resulted in the discovery of numerous violations of the state Consumer Fraud Act & Motor Fuels Act and advertising rules, the report said.
BP, which was not among the companies sued by the state, approached state officials in the midst of the Consumer Affairs statewide examination of station conduct, Ricketts told the newspaper.
Hess in November settled the lawsuit filed by the state by paying $372,391. The remaining lawsuits are pending, said the report.
In Albany, N.Y., Attorney General Eliot Spitzer said he has submitted legislation to strengthen the state's gouging law to better protect consumers against "unconscionably excessive" prices and to more clearly define violations. The bill provides that increases in prices or markups of more than 25% following the onset of an abnormal market disruption trigger a presumption of gouging. Currently, the law requires the AG's office to establish a "gross disparity" in prices charged before and after the market disruption.
"The establishment of a clear threshold for price-gouging violations removes the uncertainty that merchants face when prices are changed after a market disruption," Spitzer said. "It will make it easier for consumers and courts to identify instances of price gouging and hold violators liable for their conduct."
To deter future gouging, the bill allows the courts to levy a penalty of $500 per violation, plus three times the total profits for such violation. Currently, the maximum penalty a court can impose is a total of $10,000, regardless of the profits that the party realized or the number of consumers it injured.
Also, the current gouging law applies to all sellers in the chain of distribution, when the product sold was located in New York state prior to the sale. The proposed legislation makes clear that all such sellers are covered, even when the sale occurred outside the state.
As reported in CSP Daily News, Spitzer's office commenced investigations into allegations of gouging at stations throughout the state immediately following the hurricanes. The investigations resulted in settlements with 15 station operators paying a total of $63,500 in penalties. Other retailers, distributors and wholesalers remain under investigation, the AG's office said.
In Gwinnett, Ga., two more stations have been fined for allegedly gouging customers, said the Gwinnett Daily Post. The penalties are part of an ongoing investigation by the Georgia Governor's Office of Consumer Affairs into statewide gouging after Katrina. According to the paper, prices rose to $4 a gallon at "many" locations.
The two stations are Quick Pick Food Mart in Snellville, fined $3,000, and Shell Big H Food Store in Stone Mountain, fined $1,000. Each station must post notice of its fine and reimburse customers whose receipts show they paid more than the legal market price for fuel, according to the settlement.
Since the investigation began, 64 Georgia stations have been penalized for illegally raising prices after the hurricane, spokesperson Bill Cloud told the paper. The fines range from about $1,000 to $10,000.
And in Aliceville, Ala., an officer of McBride Oil Co. has admitted violating the state's gouging law at two Sumter County stations after Katrina, ending a legal case that he thought concluded with his payment of a $10,000 fine in November, said the Associated Press.
Jason McBride's sworn statement, filed with the county clerk's office, was sought by prosecutors when he did not appear in court to plead guilty along with paying the fine. McBride's attorney had negotiated a settlement with Sumter County District Attorney Greg Griggers and did not believe that a plea was necessary. But at the request of Griggers, Sumter County Circuit Judge Eddie Hardaway Jr. ruled that a formal plea by McBride was required.
A grand jury indicted McBride, secretary-treasurer of McBride Oil Co., on September 27 for violating the pricing act on August 31. Griggers said McBride sold gasoline at $3.69 a gallon; McBride said the retail price of gasoline at two stores was briefly $3.49 based on his purchase price of $3.29 a gallon.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.