Fuel Sellers Are Prohibited from Excessively Increasing Prices to Take Advantage of Fuel Shortages Resulting from the Colonial Pipeline Shutdown
New York Attorney General Letitia James today issued an alert to New Yorkers concerning potential gasoline price gouging following the interruption of a major fuel pipeline serving the eastern half of the United States — urging consumers to report dramatic gasoline price increases to the Office of the Attorney General (OAG) for investigation. The current disruption to the fuel market occurred after computer hackers illegally hacked into the computer system that is used to control the Colonial Pipeline, which transports fuel to numerous locations along the eastern half of the U.S., including the New York City area. The hack caused a temporary shutdown of the pipeline, creating the threat of a fuel shortage that could potentially affect hundreds of millions of Americans. In response, numerous consumers on the East Coast have reportedly engaged in panic-buying of fuel, and some sellers appear to have increased their prices in an attempt to profit from the increased demand.
“As New Yorkers continue to suffer the economic impact of the COVID-19 public health crisis, the last thing their wallets can afford is the price gouging of fuel from those seeking to unconscionably take advantage of another crisis,” said Attorney General James. “To be clear, the price gouging of fuel in New York state will not be tolerated for a moment. If our office sees profiteers take advantage of consumers by boosting prices to excess levels, we will not hesitate to take legal action. Last year, the state granted our office additional authority to stop those seeking to unlawfully profit off an emergency, so we will use every tool at our disposal to stop illegal actors and secure relief for consumers who have been overcharged for gasoline.”
New York law prohibits sellers of fuel and other vital and necessary goods from excessively increasing their prices during an abnormal market disruption, including disruptions caused by energy shortages. During such times, sellers may be allowed to increase prices to cover their own cost increases, but it is illegal for them to unconscionably raise prices simply to profit from increased consumer demand.
Additionally, last year, in response to an influx in price gouging as a result of the coronavirus disease 2019 (COVID-19) public health crisis, a law was passed that substantially strengthened Attorney General James’ ability to bring charges against those violating New York state’s price gouging statute, as they sought to excessively increase prices on essential goods and services during pandemics or other emergencies.
When reporting price gouging to the OAG, consumers should report the specific increased prices, the dates and places that they saw the increased prices, and the types of fuel being sold. Consumers should also provide copies of their sales receipts and photos of the advertised prices, if available. Gas stations that appear to have engaged in price gouging must have evidence to justify their price increases.
The OAG also advises consumers to buy only as much fuel as they need and not to stock up out of fear of a potential future shortage, as such panic buying may reduce the supply of fuel available for other consumers and could encourage sellers to engage in illegal price gouging. The OAG also advises consumers that it is not price-gouging for gas stations to limit the amount of fuel they sell to individual consumers. Reducing the quantities of sales can help avoid a small number of consumers from hoarding fuel and can, instead, ensure that there is still fuel available (even in smaller quantities) for other consumers.
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