Gas Prices Spur Consumer Gripes, Political Ferment

Although gas prices have leveled off in much of the country after a huge run-up, regional fluctuations are attractinggripes from consumers andattention from regulatorsand lawmakers. In New York, Attorney General Eric Schneiderman said he is undertaking a “comprehensive review” of gas prices in the state.

“Drivers across the Southern Tier are getting slammed at the gas pump, and have a right to know not only how gas prices are determined, but whether they're being taken advantage of,"

On New York's Eastern Long Island, a populous but relatively remote area,the price of gas is over $4 at many stations, promoting Rep. Tim Bishop (D-NY) to introduce legislation that wouldprovide for civil and criminal penalties of up to $500 million if oil companies are found to be manipulating gas prices, including taking advantage of international crises such as the recent unrest in Libya.

“There’s no supply shortage, and demand has not increased,” Bishoptold the East Hampton Star.“This is a combination of fear and speculation. Libya provides less thanonepercent of the world’s oil and I believe there’s some profit-taking going on here. This is a chance for the federal government to say no.”

Average price

The current average price of regular gasoline in New York State is $3.74, compared to $2.94 at this time last year.

In the city of Binghamton, the average price is $3.70 but Schneiderman said prices there vary widely. A gallon of regular costs $3.81 at a Vestal Avenue gas station but $3.63 at a station on Court Street, he said.

Schneiderman said his study will focus on how the current market volatility determines the cost of gas for retailers and subsequently whether that cost is appropriately passed onto consumers at the gas pump.

During disruptions in the oil market resulting from civil disorder, war, military action, and other abnormal events, those who sell gasoline are not allowed to take unfair advantage of consumers by charging grossly excessive prices, he noted. The goal of the study is to determine whether gas prices accurately reflect current market conditions or if there are unjustified price increases, Schneiderman added.

“At a time when the public is very skeptical about what goes on behind the scenes when determining gas prices, it is my responsibility to make sure that everyone involved in setting prices plays by the rules," said Schneiderman.

Angry driver

One such angry driver is Joseph of Walton, NY, who complained about the Country Score Sunoco station in Walton.

“I believe it's against the law to raise prices until they get a new delivery. They are raising their prices for the same gasoline they already have in their tanks and paid for, it's not costing them anything more,” Joseph said.

In fact, service station operators are not prohibited from adjusting their prices to current market conditions, although states have various laws prohibiting price-gouging in times of emergency.

In most states, the governor must declare a state of emergency before anti-gouging laws go into effect.

“Very bad feel”

New York's not the only state where consumers are feeling gouged. Lorraine of Surrey, British Columbia, said she left Florida earlier this month “with a very bad feel for the state after being ripped off for gas on the way to the airport.”

“We got 14 gallons of gas for $75.00...$5.29 per gallon; just down the road it was $3.49. It should be against the law to do that to people,” she told ConsumerAffairs.com.

Another consumer complained of high gas prices on Hatteras Island, N.C. “I purchased gas for $3.38 a gallon at The Breeze Thru in Avon because we heard gas was going to go up by $.26 a gallon. The major stations had gone up to $3.58 a gallon. From this morning to this afternoon they went up to $3.79 a gallon,” she said.