ALBANY, N.Y. -- Responding to consumer complaints of alleged gasoline price gouging, New York State Attorney General Eliot Spitzer's office has collected documentation about recent retail prices and wholesale costs from about 65 gas stations and convenience stores.
In a statement earlier this month, Spitzer said, My officeshave received numerous calls from consumers expressing concern at these developments and questioning the legality of the price increases. In response, I have instructed my staff to monitor the situation and pursue evidence of any illegality.[image-nocss]
But he added, The public should understand that there is no specific regulation of gasoline prices in New York. Retailers generally are free to charge whatever the market will bear; however, retailers, distributors, refiners and producers are not free to use a natural disaster, such as a hurricane, to justify dramatic price increases unless those increases are directly attributable to additional costs incurred. If they do raise prices without such justification, they may be price gouging, which is illegal under New York State law. My office will work with relevant federal, state and local agencies to determine whether violations have occurred. We will respond quickly and aggressively if evidence of price gouging is uncovered.
The New York Association of Convenience Stores (NYACS) said lettersnot summonses or subpoenaswent out September 7 to selected retailers requesting price data by September 12 as part of an investigation of whether sharp and sudden price hikes in the aftermath of Hurricane Katrina were warranted.
As much as we despise such fishing expeditions, we recommended that member retailers who were contacted comply fully with the request, said NYACS President James Calvin. There's nothing to hide. To my knowledge, all of our members acted responsibly and in the best interests of their customers in reacting to the wild surge in wholesale prices.
According to Calvin, Spitzer asked each retailer to furnish:
The price(s) at which you sold your lowest priced grade of gas on every day between August 1, 2005, and the date of this letter. If this gas was sold at more than one price on a single day, please indicate the time periods during which each price was in effect. The price(s) you paid for the lowest priced gas you sell for all gas purchased between July 1, 2005, and the date of this letter. For each purpose, indicate the date and time of the purchase, the volume of gas purchased and the price per gallon you paid for it. Copies of all invoices for gas you purchased between July 1, 2005, and the date of this letter.While the letter assured the retailers that they were not being accused of any wrongdoing, they managed to work the terms price gouging,' fraud perpetrated by businesses on consumers' and deceptive business practices' into the first paragraph, Calvin said.
Marc Violette, a spokesperson for the AG, told NYACS it was an effort by our office to better understand the economic factors that underlie the price we pay at the pump. He said they are not disclosing the locations in the media. We don't want to stigmatize them. We're not prejudging the situation. We're not assuming any illegal activity is under way. It's quite possible the station owners have a story to tell, and we want to hear it.
Meanwhile, U.S. Senator Charles E. Schumer (D) last week unveiled a report showing how much New Yorkers will have to pay for gasoline this year. He released county-by-county data detailing how much more New Yorkers in each county are paying for gasoline over last year's prices.
Schumer also called for immediate action to provide relief at the pump, including the expanded tapping of the Strategic Petroleum Reserve (SPR) announced by President Bush, an increase it the IRS mileage reimbursement formula and a top-to-bottom FTC Investigation of the entire oil industry, examining gas stations, major oil companies and pipelines.
We all know that there was a gas crisis before Katrina and now that crisis has been compounded into a full blown gasoline catastrophe, Schumer said. The effects of this disaster are being felt far and wide and in addition to the enormous personal devastation that people are feeling the economic implications for Katrina will be felt for many months and potentially years. Though we have not felt one drop of rain here in New York we have seen the prices of gasoline go through the roof, and they continue to soar. We need relief at the pump and we need it now.
And according to a report by the Little Falls Evening Times, Herkimer County (N.Y.) Legislature last week passed a resolution requesting that Governor George E. Pataki place a cap on the sales tax on gasoline purchases so that sales tax will only be collected on the first $2 per gallon of gasoline.
The resolution also asks that the legislation contain monitoring and enforcement provisions, with appropriate penalties imposed upon the distributors and suppliers of gasoline who do not comply with the governor's executive order.
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