Friday, September 30, 2005

New Jersey Goes After The Gas Gougers

In the wake of hurricane Katrina, New Jersey authorities have filed lawsuits against oil companies and station operators for, amongst other things, illegal price increases.  New Jersey law bars more than a single price increase in one day.  In some cases, there were as many as 5.

http://www.state.nj.us/cgi-bin/governor/njnewsline/view_article.pl?id=2744

Acting Governor Richard J. Codey today announced that New Jersey has filed lawsuits against oil companies and independent gas-station operators for price violations during the Hurricane Katrina crisis. ...

Oil companies Hess, Motiva Shell, Sunoco and various independent gas-station operators are charged with violating the State Motor Fuels Act and Consumer Fraud Act through their pricing practices.

The violations found at both company-owned and -operated and independently-owned gas stations include multiple price changes occurring during a 24-hour period.


Other alleged violations include:

revising gas prices at the pump more than once every 24 hours;

failing to display signs for motor fuel prices;
failing to maintain books and records;
failing to provide access to books and records;
engaging in Unconscionable Commercial Practices; and
violating advertising regulations.


New Jersey is the first state to act upon the increased gas prices but it is the only state to have a provision blocking multiple increases in one day.

http://www.nytimes.com/2005/09/27/nyregion/27prices.html

New Jersey's law against multiple-price increases in a single day dates to 1938. An antitrust measure, it was meant to protect small operators from the price wars and predatory pricing engaged in by stations owned by large oil companies.


And this: (Do you feel any sympathy for this owner?)

In interviews, some of the owners of the stations cited by Mr. Harvey said they did not know about the state law against changing prices more than once in a day. Others said they had been scrambling to stay afloat as wholesale prices rose, leaving them no choice but to raise prices. A station owner who was not cited, who said he was aware of the law forbidding multiple price changes in a 24-hour period, said he chose to close rather than break the law.

That owner, Paul Riggins, who operates and supplies more than a dozen stations in South Jersey from Wildwood to Trenton, said that on Sept. 2, "by the time one of our trucks got to the refinery, the wholesale price had risen higher than my pump price, so I closed my Wildwood station down four hours early."

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