Analysis, discussion and opinions by members of Newsday's editorial board.
BloggersAlvin Bessent Rita Ciolli Michael Dobie Joseph Dolman Lane Filler Sam Guzik Anne Michaud Larry Striegel
Crowley: Gas station fines won't be enough to stop future price gouging
The lines for gas after superstorm Sandy are something every Long Islander will remember: hundreds of people waiting for hours, either in their cars or standing online with containers, just to get some fuel to run their generators, vehicles, or other essential items.
Long Islanders are used to abusive prices at the pump, but what a few gas stations did during Sandy is just insulting.
Attorney General Eric Schneiderman has accused numerous gas stations on Long Island of price gouging during that most vulnerable of times. Already, twenty of those stations have reached settlements. According to Schneiderman’s website, the worst offenders were the BPs in Valley Stream and Smithtown, the Citgos in Bay Shore and Farmingdale and the USA station in Farmingdale, all of which increased their profit margin, the gap between what they paid for gas and what they sold it for immediately after the storm by more than 50 percent.
During the fuel shortage, demand was very high and supply painfully low, so basic laws of economics suggest that gas prices would rise. But there are laws to protect citizens from unjust merchants who charge well above the going rate during a time of crisis, better known as gouging.
State law makes it illegal for merchants to sell goods for an "unconscionably excessive price" during natural disasters.Specifically, the law says a price may be considered excessive if there is a "gross disparity" between the prices charged immediately before and after the emergency.
The USA station in Farmingdale charged $4.59 a gallon for regular gas after the storm, 42 cents above the average local price. Prior to the storm, the difference between wholesale price and retail price was $1.04. But immediately after the storm, the difference between what the station bought gas for and what it sold it for rose $.76, to $1.80, resulting in an extra $6,733 in profit.
The station was ordered to pay $23,733 for its offense. But a fine may not be enough to ensure that gas station owners don’t take advantage of Long Islanders during our next period of hardship.
Schneiderman’s website has a list of all the stations that have reached settlements. It may be worth checking to see who’s on the list, so next time you go to get fuel, you can give a friendly wave to that station owner as you pass it by to get to the non-gouging gas station across the street.
Patrick Crowley is a Newsday Opinion intern and a high school student on Long Island.