Consumer Law

Gasoline in NYC Area Hits $8 a Gallon on Craigslist; Officials Investigate


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In the wake of fuel shortages related to Hurricane Sandy, some enterprising individuals are reportedly offering gasoline at $8 per gallon on Craigslist.

But is that legal? The jury apparently is still out on that question in New York, where a spokeswoman for the office of Attorney General Eric T. Schneiderman said an investigation is under way to determine whether such sales made via the Internet classified website or through other informal networks violate any law, according to Bloomberg.

However, in neighboring New Jersey, a spokesman for the state division of consumer affairs said such sales would violate the state’s Motor Fuels Act, which requires gasoline sellers to be licensed.

In both states, officials are investigating complaints of price-gouging by gasoline retailers after the storm last week, the article reports.

In New York, state law bans merchants from selling goods or services at an “unconscionably excessive price” during an “abnormal disruption of the market,” explains a news release from the AG.

In New Jersey, state Attorney General Jeffrey Chiesa has subpoenaed about 100 businesses seeking information.

State law in New Jersey limits post-hurricane gasoline price increases to 10 percent above what was charged in the usual course of business before the emergency, the Philadelphia Inquirer reports. In Pennsylvania, state Attorney General Linda Kelly said “a price increase of more than 20 percent above the average prices observed during the week before the emergency declaration” would be considered price-gouging.

Sal Risalvato, who serves as executive director of a trade group representing about 1,000 gas stations in New Jersey, told the Inquirer that many merchants are being charged more by those delivering gasoline because of long waits at wholesale suppliers because of disruptions caused by the storm and resultant damage.

Although gasoline prices account for many complaints of excessive charges imposed on consumers after the storm, high-priced hotel rooms and power generators, as well as overly expensive and/or unqualified home construction bids have also been targets of criticism.

Bloomberg reports that unidentified individuals offering $8 gasoline for sale said they had arranged to bring in up to 100 gallons purchased either out-of-state or far away from where the storm had done the most damage.

“A lot of times in the wake of a disaster, people are trying to find resources and the normal networks are blocked,” said economics professor Mark Skidmore of Michigan State University. “So people find creative ways to get it in, but it’s more expensive. They are providing a service in some sense.”

An article on the Huffington Post, which includes screenshots, says sellers on Craigslist are seeking to get as much as $20 per gallon for a five-gallon container of gas, delivered, in areas hard-hit by the hurricane.

Additional and related coverage:

Long Island Press: “Post-Hurricane Sandy Price Gouging Investigation Opened”

South Florida Sun-Sentinel: “Gas prices keep dropping, more good news to come”

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