ALBANY, N.Y. — A state legislator is calling on New York’s attorney general to examine why gasoline prices in the state have not declined as much as those in the rest of the country.
In a May 5 letter to New York Attorney General Letitia James, Assemblyman Angelo Santabarbara points to data from AAA that shows a gap between New York’s average retail price of $2.178 per gallon to the national average of $1.774. In his letter, Santabarbara, who represents the 111th district and sits on the assembly’s agriculture and energy committees, said the national average is 81.45% of New York’s average. Meanwhile, at this same time last year, the national average was 97.6% of New York’s average retail price.
According to Santabarbara, New York State is one of only 12 states where the retail average for gasoline has remained above $2 per gallon.
“Many of my constituents are asking why they are not seeing more of a price drop here in local gasoline prices,” wrote Santabarbara, who represents Albany, Montgomery and Schenectady counties. “In comparison, some noted that gas prices seem to rise much quicker when market prices rise. With that in mind, by the time New Yorkers head back to work, prices may even start rising again.”
He asked James to investigate the issue. “We must ensure that consumers are not being taken advantage of during these difficult times,” the letter concludes.
Regional Differences
In a May 6 response to Santabarbara supplied to CSP Daily News, James Calvin, president of the New York Association of Convenience Stores (NYACS), Albany, N.Y., cited data from the New York State Energy Research and Development Authority that showed the state average on May 4, 2020, was 87 cents per gallon (CPG), or about 30%, lower than its same point one year ago.
“As to your concern about New York being one of 12 states where the average price has not yet dipped below $2 a gallon, comparing gas prices by state is comparing apples and oranges due to wide disparities in gasoline tax rates,” Calvin wrote. State and local taxes account for about 44 cents of the price of a gallon of gasoline in New York, he said, but only about 20 cents in Texas. “In addition, retailers in other states may not be experiencing the precipitous drop in gasoline demand that New York has,” he said.
Calvin also pointed out that within the state of New York, prices can vary by 15 to 30 CPG in a particular market because of differences in retailers’ supply channels, purchasing contracts, operating costs, competition and local consumption patterns.
“Fuel is still an extremely volatile commodity,” Calvin wrote. “This week, the wholesale price has jumped about 15 cents a gallon, but hardly anyone noticed because retailers generally held street prices steady for the time being. Trends in global demand will influence pricing going forward.”
While per-gallon retail margins during the pandemic have been “unusually high,” Calvin said, many operators have seen 50% declines in gasoline volumes and 30% to 40% drops in inside sales, even as they continue to deal with their usual operating costs. “Without deriving more gross profit from each gallon of gas sold, they couldn’t afford to stay open and couldn’t maintain their workforce,” he wrote.
“Our members will continue doing their utmost to remain economically viable, price competitively and make sure the neighborhoods they serve can count on them as a ready source of gas, food, and other supplies,” Calvin said.
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