As lines grew at gas stations throughout Queens, prices at the pump swelled as well, prompting an investigation into gouging.
State Attorney General Eric Schneiderman announced the first series of actions in what his office called “a wide-ranging investigation” into post-Sandy price gouging at gas stations throughout New York. The attorney general plans to begin enforcement proceedings against the 13 New York gas stations, while investigating hundreds of others.
“Our office has zero tolerance for price gouging and we are taking action to send a message that ripping off New Yorkers is against the law,” said Schneiderman.
Three of the targeted gas stations are in Queens:
• The Mobil station at 40-40 Crescent Street in Long Island City, which according to consumer complaints charged customers $4.89.
• The Shell at 71-08 Northern Boulevard in Jackson Heights, where customer complaints said drivers were charged $5.50.
• The Delta station at 13-09 14th Avenue in College Point, which charged $5, according to consumer complaints.
According to the state’s business laws, merchants are prohibited from taking advantage of consumers during an “abnormal disruption of the market” by hiking prices to an “unconscionably excessive price.”
While “unconscionably excessive price” is not specifically defined, the attorney general’s office said a before and after analysis of prices can be used as evidence.
Gas prices jumped 15 cents in the two weeks after Superstorm Sandy, even as gas prices nationwide fell.
“These 13 retailers stand out from others in the high prices they have charged and in the size of their price increases,” Schneiderman said.
Schneiderman said that the L.I.C. Mobil station had a posted price of $3.89, but after waiting on a three-block line, the consumer found the price at the pump to be a dollar higher. The station would not comment on the investigation.
A worker at the Delta station said they were forced to up prices after the cost of the gas they were buying also rose.
After Sandy, the station was paying $3.89 per gallon, a 48 cent jump from before the storm, according to receipts.
Six employees, up from one, were also working around the clock at the full-service station to keep up with the demand, which pushed prices higher, said the employee, John, who did not want to give his last name.
“What were we going to do, take the money out of our pocket? No, you put it in the price,” said John, who also said that the station’s prices never went above $4.50.
If gas stations can justify why their costs went up, they will not be charged, said the attorney general’s office.
Penalties for price gouging includes fines, which are calculated based on how much illegal profits were made, according to the attorney general’s office.
Councilmember Peter Vallone does not think the punishment goes far enough.
“Clearly, the penalties that exist are insufficient to protect the public in times of crisis,” Vallone said. “These gas stations in particular apparently see fines as the cost of doing business. Anyone who would try to profit from another person’s pain during an emergency deserves to face jail time.”