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Investigations of $5 Gas in North Carolina, Florida, and Virginia

Price gouging, shortages at the pump probed

By Joe Benton
ConsumerAffairs.com

September 18, 2008

The average price of regular self-serve gasoline dropped 2 cents throughout the country overnight to $3.835 but thousands of consumers continued to complain to state officials about price gouging immediately following Hurricane Ike.

Prices climbed almost 19 cents over an eight day period as Ike moved across the Gulf of Mexico, jumping 6.2 cents on Sunday alone.

Price-gouging complaints are flooding state officials in Florida, Virginia and North Carolina.

Along with high prices in Florida, the Attorney General's office reported that there continues to be some gasoline shortages throughout the state.

Consumers in Tallahassee faced plastic bags over fuel pumps as the aftermath of Hurricane Ike disrupted gasoline deliveries.

Palm Beach topped the number of price gouging complaints in South Florida with 93. Broward registered 63 and Miami-Dade had 58 complaints. Pumps dried up throughout West Palm Beach as handmade signs stuck to pumps proclaimed no gas was available.

Florida Attorney General Bill McCollum's office reported a total of 5,500 calls from around the state and 2,397 open cases for review of price-gouging violations.

As part of its inquiry, the attorney general has issued subpoenas to four oil companies.

The attorney general in Florida can fine stations that took advantage of consumers as much as $1,000 for each consumer or up to $25,000 a day, according to the state price gouging law.

Gas prices in some areas of the Sunshine State jumped more than a dollar to more than $5 a gallon in Tallahassee, Orlando and Miami, according to reports.

The Office of Consumer Affairs in Virginia has received more than 2,000 consumer complaints about price gouging and the state ha sent 30 inspectors statewide to investigate the complaints.

The penalty for price gouging in Virginia is a fine of up to $2,500 for each violation.

The Virginia Office of Consumer Affairs reported that proving price gouging following Hurricane Ike will be difficult because prices may have already been inflated follow Hurricane Gustav disruption of Gulf Coast refining capacity a few weeks ago.

Virginia Governor Tim Kaine issued a waiver in the state that allows the distribution of gasoline blends not usually sold until October 1 in an effort to increase gas supplies in the state.

In North Carolina, the attorney general subpoenaed seven gas stations that were reported to have charged $5.49 a gallon for regular gasoline following Hurricane Ike.

North Carolina Governor Mike Easley also warned consumers in the state that "there may be temporary limitations on our gas supply."

The attorney general in North Carolina has received 2,800 consumer complaints of dramatic increases in gas prices, some occurring over a matter of hours. Investigators have sent subpoenas to seven separate retailers that were allegedly charging in excess of $5.49 per gallon on either Friday or Saturday.

Tom Crosby, a spokesperson for AAA Carolinas said the problems with high gas prices are attributed to both the shortage due to Hurricane Ike and a public panic.

"We have what's called 'panic pumping,' where motorists drained the supply of gas more than they needed to," he said. "And at the same time we had a problem with the hurricane affecting the supply of product from the Texas area."

Crosby said he predicted gas prices would stabilize later this the week.

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