New York Gas Stations Fined for Alleged Price Gouging
By Kevin Harlin, Times Union, Albany, N.Y.
Dec. 20–ALBANY — A gas station in Colonie and 14 others across the state will pay fines totaling $63,500, after state Attorney General Eliot Spitzer accused them of overcharging motorists in the wake of Hurricane Katrina.
The Mobil station at the corner of Central Avenue and Fuller Road agreed to pay $2,000, Spitzer’s office said Monday. Other stations will pay up to $10,000, the maximum fine allowed under the state’s anti-gouging statute.
Gas prices nationwide surged after the Aug. 29 hurricane knocked out Gulf Coast refineries. Motorists cried foul, sparking congressional hearings in Washington, D.C., and Spitzer’s three-month inquiry.
“We picked the 15 cases where our evidence was most strong, and we thought we could send the most powerful message,” Spitzer said at a news conference at the Capitol.
No one from the Central Avenue station returned calls for comment.
But Ralph Bombardiere, executive director of the New York State Association of Service Stations and Repair Shops, a trade group, said the stations weren’t gouging and agreed to pay the fines only to end the probe.
“I think it’s a joke,” he said. “Haven’t you ever dealt with the state? It’s pay this now or pay me a lot more later.”
Spitzer said his office sought wholesale and retail price data from 80 stations in the state, and found that the 15 cited had all raised their markups by more than 25 percent after Hurricane Katrina — a spike that he said was not justified by market forces.
He said the size of each station’s fine was designed to “disgorge” what he called excessive profits.
Bombardiere disagreed that any of his members raised their margins that high and said their retail prices went up to cover the rising costs of their inventory.
Spitzer’s office said the price of a gallon of regular-grade gasoline at the Mobil station cited in Colonie had climbed to $3.40 a gallon after the storm, from $2.70 just before it.
The price was down to $2.399 on Monday afternoon. At a Sunoco station across the street, the same grade was selling for $2.379 a gallon. Prices ranged from $2.349 to $2.459 at nearby stations.
The last time the state levied fines in a gouging case was in 2003, when it claimed two Rochester-area hotels raised rates in response to increasing demand after a winter ice storm.
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