State AG to probe possible price gouging in gas, oil industries, source says

New York Attorney General Letitia James has launched a formal investigation of the gas and oil industries, “from production to pump,” according to a person familiar with the probe, who said it will look into possible price gouging.

New York is expected to be among the first states to probe the matter, amid soaring prices for gasoline and diesel fuels over the past several months.

James’ office will look at “the entire supply chain” for fuel in New York, during normal supply periods and times of “disruption,” to probe for potentially illegal price increases, the source said. It will examine pricing practices of the biggest oil and gas producers, refineries, pipelines, terminals and distributors who supply gas and diesel to the state, the source said.

“It’s not just looking at the gas station; it’s looking at every single point in the supply chain to determine if wrongdoing occurred by any of the multiple companies involved in the supply chain," the source said.

Home heating oil prices, which have also soared to record highs in recent months, are not a focus of the probe, but it could be included later, the source said.

The move comes as gasoline, diesel and home heating oil prices have skyrocketed through the late winter and spring, in part because of geopolitical pressures tied to the war in Ukraine. 

This week the federal government reported the Consumer Price Index jumped 1.2% in March, contributing to an overall 8.5% increase from a year ago — the biggest year-over-year increase in 40 years. Gasoline price increases led the way, jumping 48% during the period.

Statewide, the average price Wednesday was $4.21, compared with $2.89 a year ago, according to the AAA. On Wednesday, the average price for a gallon of regular gasoline on Long Island was $4.043, according to GasBuddy.com.

“Soaring gas prices are forcing working New Yorkers and low-income families to make difficult decisions on whether to pay bills or put food on the table," James said in a statement. "Price gouging is unfair and illegal and my office is determined to make sure it doesn’t happen in our state."

Kevin Beyer, vice president of government affairs for the Long Island Gasoline Retailers Association, an industry group, said James’ probe could be “barking up the wrong tree.”

He blamed volatility and a steady drumbeat of oil and gas prices on the policies of the Biden administration.

“I really don’t believe it’s happening,” he said of price gouging, noting that most retail prices on Long Island, while high, are “pretty much the same.”

“You’re not seeing anything crazy" and customers have alternatives to the highest prices, he said. “They [the AG's office] can do all the investigating they want and maybe something will come of it, but I really don’t believe it’s happening.”

James’ office in March had warned New Yorkers to beware of potential price gouging, and warned oil and gas companies that the practice is illegal. New York law prohibits sellers of fuel and other "vital and necessary goods" from charging "unconscionably excessive prices during an abnormal market disruption," including disruptions caused by world conflicts, the office said.

By Mark Harrington

mark.harrington@newsday.comMHarringtonNews

Mark Harrington, a Newsday reporter since 1999, covers energy, wineries, Indian affairs and fisheries.