15 Gas Stations Fined for Price Gouging In the Wake of Hurricane Katrina
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Fifteen state gas stations in New York State, including two in the Bronx, have been slapped with fines for price gouging in the wake of Hurricane Katrina, the state attorney general, Eliot Spitzer, said yesterday.
In separate settlements, each station agreed to pay fines between $2,000 and $10,000 for violating a clause in state law that prohibits the sale of a vital good at an “unconscionably excessive” price during a natural disaster. The investigation is ongoing, and a spokesman for Mr. Spitzer, Paul Larrabee, said that more fines could be on the way.
“We are hoping that these 15 cases, distributed across the state, will send a message to retailers that you cannot, under New York law, and you cannot in good conscience take advantage of an environmental debacle to extract unfair prices from the consuming public,” Mr. Spitzer said at a news conference in Albany yesterday.
Among the penalized gas stations were two in the Bronx – a Lukoil at 1895 Bruckner Blvd. and a BP Amoco at 1866 Westchester Ave. Two stations in Westchester County and three in Nassau County also paid fines.
Hurricane Katrina’s devastation of the Gulf Coast in late August prevented much of the East Coast from accessing its oil and gas supply, resulting in record prices at the pump. The attorney general’s office started its probe in the days after the storm by obtaining invoices from 80 stations where customers complained about surging prices. The investigation found that 15 of the stations had increased their markup by at least 25% after the storm.
A corporate spokesman for Lukoil Company declined to comment, as did the owner of Hilltop Service Station in Westchester, which raised its gas price to $4.00 a gallon after the hurricane, compared to $2.69 before the storm.
A spokesman for BP Amoco, John Curry, said the company did not own or operate the station bearing its name in the Bronx, but urged “caution and good judgment in pricing.”
Owners and managers of the penalized gas stations in the Bronx, Westchester, and Long Island declined to comment on the record, saying they didn’t want their gas stations publicly scrutinized. As part of their agreement with the attorney general, gas stations admitted to overcharging, but some owners and managers said they agreed to pay fines rather than face potentially higher attorney’s fees if they tried to contest the penalties.
The amounts of the fines, which totaled $63,500, were determined by the prices each station charged, and how long the prices remained in effect. The agreements subject the stations to much larger fines if they price gouge in the future, the attorney general said.
Mr. Spitzer also called yesterday for the state Legislature to strengthen New York’s price-gouging law, saying the current rules were “a bit too elastic for our taste.” He proposed that price gouging in a natural disaster be defined as raising the markup by 25% or more. He also suggested that penalties be set at $500 for each violation, plus three times the gouger’s profit. “Current law does not provide a strong enough deterrent to price gouging,” Mr. Spitzer said.