HARRISBURG, Pa. -- The Pennsylvania attorney general's office has taken legal action against gas stations it says engaged in price gouging, according to a report by the Allentown Morning Call. Two Pennsylvania companiesTurkey Hill, Lancaster, and the Valley General Store, Petersburgface thousands of dollars in fines, part of settlements with the AG's office.
Turkey Hill will pay $6,000 in fines for prices charged at its stores in Shillington and Mountaintop. The Valley General Store will pay the state $1,000.
Under the agreements, [image-nocss] each called an assurance of voluntary compliance, the companies do not admit to wrongdoing, said the report.
It is the only legal action the state has taken in response to the nearly 1,000 complaints it received from consumers concerning September pump price increases after Hurricane Katrina, the report said.
After the hurricane, Turkey Hill's Shillington store raised its average price for regular unleaded gasoline to $2.99 a gallon, a 23% increase, said the newspaper, citing papers filed April 6 in Commonwealth Court. The price for premium gasoline went up by 29%, to $3.48 a gallon. The Mountaintop store raised its price for regular unleaded from $2.89 a gallon to $3.19 a gallon on September 2. Meanwhile, the wholesale prices remained constant, the court papers said.
Turkey Hill was consistently increasing the retail gasoline price to consumers and took unfair opportunity of existing market conditions by maintaining excessive prices during a time when its wholesale costswere never increasing, the documents said.
The Valley General Store charged consumers 80 cents more per gallon for gasoline than other stations in the Huntingdon County area, the state said in papers filed March 15, also in Commonwealth Court, according to the Morning Call.
If either company engages in price-gouging in the future, it would be subject to a $5,000 fine per violation, Barbara Petito, deputy press secretary in the AG's office, told the paper. In Turkey Hill's case, she said, the $5,000 fine would apply to price-gouging at any of its stores, not just the two investigated.
Turkey Hill spokesperson Erin Dimitriou Smith told the paper that the company's settlement absolutely is not an admittance of price gouging. We just wanted to sign it to ensure our customerswe're committed to providing them with fair-priced gasoline, Smith said. The company agreed to extend the agreement to all of its stores to send the message to consumers that it's committed [to fair prices]at every location, she said.
The AG's office has issued warnings to other companies and is continuing to investigate dozens of complaints, said Petito. But the state's ability to penalize price-gouging companies is curbed by the fact that is does not have a law prohibiting price gouging, she said. Without such a law, the only tool the AG's office has is the Pennsylvania consumer protection law. Under that law, price gouging is a civil offensepunishable by a fine of $1,000 or more per offensein cases where companies make unconscionably high profits. But the law does not clearly define price gouging or what constitutes unconscionable. That means judges in different counties can set different standards on a case-by-case basis. What's unconscionable? Petito said. It's up to the judge.
After Katrina struck, Corbett implored lawmakers for a clear definition that includes what percentage above wholesale is considered price gouging. Across the country, a number of AGs in states without price-gouging statutes made similar pleas to their lawmakers. But Pennsylvania lawmakers have been slow to act, the report said. The state House and the Senate passed competing versions of a price-gouging bill and now are at an impasse, according to State Representative Karen Beyer (R), who sponsored the House bill.
Beyer's bill would define price gouging as a price increase in excess of 15% from prices usually charged. To be considered gouging, the increase must occur in the seven days before an emergency declaration, such as a hurricane, or in the 30 days after a declaration. The bill passed the House unanimously, but remains in a Senate committee. Similarly, the Senate bill passed that chamber, but now sits in a House committee, the report said.
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