2009.06.01
Price gouging at the pump
We're writing an editorial for later in the week about a settlement between the state attorney general's office and Bucko's Pantry. Bucko's owns gas stations in Radford and Dublin. After Gov. Tim Kaine declared a state of emergencey in anticipation of Hurricane Ike, Bucko's charged some outrageous prices for gas.
Price gouging is illegal in Virginia, and it's good to see the AG enforcing this law in a reasonable manner. (Read the full press release below.)
COMMONWEALTH of VIRGINIA
Office of the Attorney General
Richmond, VA 23219
William C. Mims 900 East Main Street
Attorney General Richmond, Virginia 23219
804-786-2071
For Release: June 1, 2009 Contact: David Clementson
www.vaag.com 804-692-0552
Attorney General Announces Price Gouging Settlement with Gas Stations in Radford, Dublin
RICHMOND – Attorney General Bill Mims today announced a price gouging settlement with L. V. Stone, Incorporated d/b/a Bucko’s Pantry, a gasoline retailer with stations in Radford and Dublin.
The settlement relates to allegations that Bucko’s Pantry violated the Virginia Post-Disaster Anti-Price Gouging Act by charging unconscionable prices for gasoline after Governor Kaine declared a state of emergency on September 10, 2008, as Hurricane Ike approached the Gulf Coast. The settlement, technically known as an Assurance of Voluntary Compliance, has been filed with the Circuit Court for the City of Radford.
“This settlement will send a strong message that Virginia intends to enforce our Anti-Price Gouging Act,” Attorney General Mims said. “Those who would take advantage of Virginians by price gouging for gasoline or other necessities will not be tolerated.”
In the Complaint filed along with the Assurance, the Attorney General alleges that certain prices Bucko’s Pantry charged for gasoline on the evening of Friday, September12, 2008, and the morning of Saturday, September 13, 2008, were unconscionable as grossly exceeding the prices the station charged during the 10 days immediately before the declaration. Specifically, the Complaint alleges that the following prices charged during these periods at three retail locations were unconscionable: Bucko’s Pantry #1, 7554 Peppers Ferry Road, Radford, Regular ($5.799), Mid-Grade ($5.899), and Premium ($5.999); Bucko’s Pantry #2, 629 E. Broad Street, Dublin, Regular ($5.699), Mid-Grade ($5.799), and Premium ($5.899); and Bucko’s Pantry #4, 1700 First Street, Radford, Regular ($4.99), Mid-Grade ($5.099), and Premium ($5.199). The Complaint further alleged, as an example, that the Regular gasoline price of $5.799 charged at Bucko’s Pantry #1 represented a 61 percent increase over its September 8 price of $3.599.
The settlement enjoins Bucko’s Pantry from engaging in any of the practices alleged to violate the Virginia Post-Disaster Anti-Price Gouging Act and the Virginia Consumer Protection Act, and requires Bucko’s Pantry to set aside $400 for consumer restitution. This amount is based, in part, on sales transaction receipts Bucko’s Pantry provided identifying the individual gasoline transaction and/or shift sales made September 12 and 13 at the prices deemed unconscionable.
The settlement requires Bucko’s Pantry to provide notice to its customers that they may be eligible for restitution by posting signs on its front door and on each individual gas pump. It also requires the company to identify credit and debit card customers who purchased gasoline at the prices and on the dates noted above and to credit a refund to their credit or debit cards for the appropriate amount of the overcharge.
The settlement further requires Bucko’s Pantry to pay $2,800 to reimburse the Commonwealth for its costs, investigative expenses, and attorneys’ fees in this matter. And the settlement requires Bucko’s Pantry to make a contribution of $800 to the American Red Cross Disaster Relief Fund. This payment is in lieu of a payment of civil penalties.
The Attorney General notes that Bucko’s Pantry cooperated with his Office and with the Virginia Department of Agriculture and Consumer Services, and its Office of Product and Industry Standards, throughout the investigation of this matter.
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Well, I get a small chuckle of satisfaction over this one and I'm heartened to hear that they were found to have been gouging. I remember posting a picture of their marquee that night and posting a blog comment entry on it. It looks as though someone noticed.
Comment by Other John — June 1, 2009 @ 4:16 pm
Do you have a link to your posting and picture, OJ?
Comment by Jack — June 1, 2009 @ 4:48 pm
Kaine and the Democrats worked SO hard and spent SO much money to find a price-gouger to blame their bad policies on. All those investigations last summer that came up with nothing had to be a real embarrassment, so they're really trumpeting up this one guy in Dublin.
Comment by DT — June 1, 2009 @ 8:07 pm
Um...DT? Kaine's "bad policies" were responsible for Bucko's criminal behavior..exactly...how?
Comment by Kristen — June 1, 2009 @ 10:46 pm
DT, The gouging was quite real. The Fairlawn site, the one I got the pciture of, was charging nearly $2.00 more per gallon than the Sheetz just up the road, or the Hess, Chevron, or Citgo a little further toward Radford. The highest of those other 4 stations was 3.89 at Chevron at the time, while Sheetz went to $3.79 and stayed there. By late Saturday afternoon, Buckos dropped back down to around $3.99, but for the nearly 24 hours that they jacked their prices up, there really was no justifiable reason to do so.
As for the picture, click the link in my name to take you to my blog. I posted the picture there so you can take a look.
Comment by Other John — June 2, 2009 @ 12:19 am
As for the original posting, I can't remember where I posted it since it was nearly a year ago. But I do remember submitting the info to the state on a website for gouging, and it appears many more did too because I was unaware of the other stations run in the chain and how much they were charging, since they are not on my regular driving routes.
Comment by Other John — June 2, 2009 @ 12:23 am
Other John,
I know when gas prices are up, I get fairly scrupulous about where I fill up. So my question is, what idiot would pay $2.00 more for gas when they can get it across the street at Sheetz as you say?
Just let the free market do its job and let this guy's pumps sit idle. Kaine doesn't need to grandstand and blame the evil private sector.
Kristen,
Kaine vigorously opposed off-shore drilling and called for an increase in the gas tax. This was while gas prices were $4 a gallon. So in order to deflect attention from his impossibly ridiculous energy agenda, he needed desperately to find some private sector goats who he point to and shout "Here! These evil crooked price gougers are the REAL culprits". So Kaine and his goons spent thousands of dollars and manhours investigating gas stations and found absolutely zilch, which made them look incredibly petty and silly on top of being incompetent. So now they found ONE guy, and boy are they making a big to-do over it.
Comment by DT — June 2, 2009 @ 7:47 am
DT, that was part of the problem. The whole mess would have been avoided if people didn't freak out and panic buy. The Sheetz down the road ran out of gas temporarily, Citgo and Hess also temporarily ran out (they had/have very small tanks since they were/are older stores), and Chevron closed for the day. For some folks, they had no other choice...though granted, based on the sales numbers, it wasn't a lot of customers. The owner of the station said his main reason for doing it was to preserve his reserves of gas because he didn't know when they would be able to get a re-supply, so he raised his prices to slow sales (it worked, but the price raise had nothing to do with changes to the commodity price itself). If he was so concerned about not getting new supplies or slowing sales until the crisis passed, he could have simply shuit down the pumps and bagged them until the storm passed. Rather, he marked his product up severely and took advantage of several drivers who filled up there while he was charging the higher prices. Plus, when he did that, it helped to further fuel the buying panic because people thought gas was going to get that expensive everywhere. So, in some ways, he's getting off light, and maybe this example will serve to discourage other gas stations from doing similarly outrageous things in the future.
Comment by Other John — June 2, 2009 @ 8:48 am
Seriously DT, are you one of those people who thinks drilling off our beaches will bring down the price of gas or improve our transportation system? I do not know when it is that people begin to swallow, but it must start earlier than is strictly good for you for some. Virginia's infrastructure system is hurting to the point of damage and people are still clamoring for more to be done with less taxes. You just make no sense to me. I know the party line and you seem to have absorbed it well so explain exactly how drilling off our beaches will help Virginia. Explain how we can build and repair roads and bridges without the revenue needed?
Comment by Sandi Saunders — June 2, 2009 @ 9:13 am
I for one would support a raise in the gas tax that would help fund public transportation/alternative transportation initiatives. That would do 2 things at the same time: 1. get people out of their cars faster because gas would start to be too expensive 2. provide funding for the public transportation that we so desperately need to be moving towards.
Drill? We all know that's a bandaid...and a small cheap one that's lost most of its stick before we even put it on.
Comment by HCS — June 2, 2009 @ 9:20 am
I’ll explain it again…price 'gouging' can be good during a crisis.
First, the weatherman (yes, I typed it…weatherman) comes on and hypes up a storm in order to get your attention.
I’m assuming nobody will argue that this happens.
Second, every paranoid little blue hair runs to the grocery store and buys everything in sight.
If you need proof just drive buy a Kroger the evening of the weatherman’s threat.
Then, if the 1 in 50 chance of the weatherman’s predictions hits and a huge ice storm knocks out power then what happens?
Well, the first person to the store gets whatever batteries and jugs of water were left after the blue haired hyenas tore through.
Now a guy has 10 times as many batteries and jugs of water than he’ll ever need while everyone else has none.
Guess what happens next!
The entrepreneur marches out to the parking lot and sells the batteries at five times the price.
So, you let the stores 'gouge' and everyone gets supplies AND some guy isn’t playing pimp in the parking lot…at least the store pays taxes on the gouging.
In your moral little world you think that ‘gouging’ is mean and taking advantage of the situation.
And, well, many times the people doing the ‘gouging’, like the parking lot pimp, are doing just that.
But, don’t be so quick to criminalize every action, because ‘gouging’ could save you.
Price 'gouging' follows the most basic economic rule of supply and demand.
Note: apologies for any grammatical errors
Comment by terry — June 2, 2009 @ 9:31 am
Other John,
I don't see why it's a big deal unless there was collusion, which there wasn't. If the guy wants to charge $2 more, that's his business. Discerning buyers will go across the road where it's cheaper, and the guy will be left out. But if Sheetz and others run out of gas and this guy has gas on hand, then he's providing a service to the customer the other stations can't and should be rewarded. Kaine is doing nothing but interfering with the free market, then grandstanding while he makes it the villain.
Sandi,
If offshore drilling provides more energy in 3,5, or 7 years, then that's 3, 5, or 7 years sooner than we have now. Because of Democrat obstruction on drilling, we have a big fat nothing and are no closer to energy independence. We could have started last year. Now a year has been wasted. Are Democrats really that shortsighted, or is it all about politics for them?
Comment by DT — June 2, 2009 @ 9:38 am
HCS, we are likely headed toward a punitive tax on gasoline similar to what Europe and much of the world already has, which encourages people to use transit options, change their lifestyles and habits, and drive smaller more fuel-efficient cars when they do drive. I'm not sure I like the thought of a $4.00 or so per gallon tax levied on gas or diesel, but it's going to likely happen at some point in the next decade.
Comment by Other John — June 2, 2009 @ 9:50 am
DT there is absolutely zero reason to believe that drilling would induce the oil companies to lower prices for gasoline. Why would they? They've already learned that people are forced to pay whatever it is they feel like charging.
The price of oil is at the mercy of lots more factors than just "supply and demand". For example,the effect of speculation on the price of a barrel of oil. Drilling off our beaches and further screwing up what's left of our environment would do nothing more than just that.
Anyway, opposition to offshore drilling did not force this clowndog to jack up his prices the way he did. And since he cut a deal, we know he's guilty.
Comment by Kristen — June 2, 2009 @ 10:33 am
"DT there is absolutely zero reason to believe that drilling would induce the oil companies to lower prices for gasoline. Why would they? They've already learned that people are forced to pay whatever it is they feel like charging."
Um. Were you living in America last summer when gas was $4.00 a gallon, then fell to $1.30 in the fall?
"Drilling off our beaches and further screwing up what's left of our environment would do nothing more than just that."
Are the Gulf of Mexico beaches screwed up because of the drilling down there? No oil was spilled for the wells during Katrina. These companies are damn good at keeping things clean
Comment by DT — June 2, 2009 @ 10:41 am
DT: "Um. Were you living in America last summer when gas was $4.00 a gallon, then fell to $1.30 in the fall?"
Um, you know that's because a global recession tanked the market for oil (which had the secondary, but salutary effect of giving a bunch of speculators who had also been driving up the price of oil a well-deserved bath)? It had nothing to do with drilling inducing oil companies to lower prices.
Comment by Dan Radmacher — June 2, 2009 @ 10:46 am
That's because the Democrats won't let us drill.
Comment by Henry — June 2, 2009 @ 10:55 am
That's because the majority of people who want to drill won't be alive to see the prices go down when the prospecting, surveying, and drilling is done (30+ years from now.) So why do it?
Comment by scott — June 2, 2009 @ 5:30 pm
"Are the Gulf of Mexico beaches screwed up because of the drilling down there? No oil was spilled for the wells during Katrina. These companies are damn good at keeping things clean"
Tell the victims of the Exxon Valdez drunk captain how "damn good" these companies are at keeping things clean.
There's a lot more than just drilling. There's also transport.
The Gulf beaches are one tanker accident away from being screwed up.
Comment by Kristen — June 2, 2009 @ 5:46 pm
See Page 27: "...as a result of both storms (Rita and Katrina), 124 spills were reported with a total volume of roughly 17,700 barrels of total petroleum product"
http://www.mms.gov/tarprojects/581/44814183_MMS_Katrina_Rita_PL_Final%20Report%20Rev1.pdf
They are not good enough to sacrifice the tourist industry for any length of time for the dubious gains IMHO.
Comment by Sandi Saunders — June 2, 2009 @ 6:29 pm
Thank you for the link to the report. It makes my point nicely. From the executive summary:
"DNV evaluated the available failure report and industry practices and has concluded that the vast majority of GOM offshore pipeline performed well during the passage of Hurricanes Katrica and Rita.
The impact to the environment has been minimal in hurricane events primarily due to the design features and industry industry practices."
Let's see two hurricanes in the Gulf, a Cat 4 and a Cat 5 and the oil rigs did remarkably well. Virginia rarely gets hurricanes like that, so it looks like oil could be taken off our shores pretty cleanly.
Comment by DT — June 2, 2009 @ 7:31 pm
"And since he cut a deal, we know he's guilty."
Now there is a refreshing viewpoint. So we can assume that anyone who cuts a deal is, without a doubt, guilty. Where was that viewpoint a couple of weeks ago when the defense lawyers found the oh so receptive audience to there proclamation that countless defendants were "forced" to plead guilty by prosecutorial bullying and that jails were full of 'innocent' people who only plead guilty to avoid longer sentences?
Sandi, I read page 27 as you suggested. The report you cited, in what I surmise is an attempt to show the terrible damage from oil spills caused by one of the most catastrophic hurricanes ever to hit the US, went on to categorize the resulting damage from these spills as "minor" with "no onshore impacts." It actually seemed to prove DT's point that the companies are good at keeping things clean. By the way, how do you suppose all the tourists reach the tourist locations?
Comment by C Ramsey — June 2, 2009 @ 7:43 pm
Well if DT had said the amount of petroleum spilled was minimal in comparison to what it could have been or some such honest characterization, I would have let it lay there, but he said "No oil was spilled for the wells during Katrina". I did not prove his point, I proved he was wrong. I never said there was terrible damage I said it was not worth the trade off to me. We all know that some people will drill in the most pristine places on earth to prevent having to meet the changes need to move toward other choices, so the coast of Virginia would hardly be expected to be held in abeyance.
Comment by Sandi Saunders — June 2, 2009 @ 8:09 pm
Dan, Kristen said people will pay whatever the oil companies charged. My statement was to show how untrue that is.
"Um, you know that's because a global recession tanked the market for oil (which had the secondary, but salutary effect of giving a bunch of speculators who had also been driving up the price of oil a well-deserved bath)? It had nothing to do with drilling inducing oil companies to lower prices."
I never said the drop in price was due to drilling, although drilling would reduce prices over time. The announcement of drilling would likely depress prices immediately if prices were high.
Comment by DT — June 2, 2009 @ 8:11 pm
DT: "Dan, Kristen said people will pay whatever the oil companies charged. My statement was to show how untrue that is."
How does your statement show how untrue what Kristen said was? Weren't people paying $4 a gallon? Would they not pay it again if the oil companies charged it? The price of gas came down, as I said, because of the global recession and its impact on the supply and demand for oil, not because people refused to pay.
Comment by Dan Radmacher — June 2, 2009 @ 8:34 pm
Dan, Kristen said people will pay what the oil companies ask, so why would anyone think oil companies will lower their prices. If that were true, the companies would still be charging $4 or more.
Your point that demand fell only proves that oil companies aren't as all-powerful as Kristen claims.
Comment by DT — June 2, 2009 @ 8:40 pm
This whole illustrates just how misguided and inept Obama and Hillary were last year when they were demonizing Exxon Mobil "for earning record profits while everybody is paying through the nose for gas". Obama and Hillary both called for a windfall profit tax I never heard any Democrat thanking all-powerful Exxon for cutting prices 300% by December. I never heard any of them calling for a subsidy for Exxon. But you wait. When gas goes up again, the sanctimious bleating will return. It will be greedy old Exxon bilking the public again. The private-sector demagoguery never stops with these people.
Comment by DT — June 2, 2009 @ 9:01 pm
DT thinks that when confronted with a greater supply the benevolent oil companies will turn around and pass on to us the benefits through lower prices! Nice!
For every barrel we pull out OPEC will just decrease production by one barrel. This isn't complicated, and drilling is not the answer.
Comment by Kristen — June 2, 2009 @ 9:54 pm
"And since he cut a deal, we know he's guilty."
CRamsey...I learned this during the Clinton years. You know...Clinton made a deal so he's a rapist. Ring a bell?
Comment by Kristen — June 2, 2009 @ 9:55 pm
It is an outrage that the gas station owner is being forced to make retribution of any type.
He owned a commodity which others did not have. He set a price and consumers willingly purchased at the offered price. Choices were available; buy gas elsewhere or don’t buy gas at all.
I applaud the owner for being on the ball and aware of what was going on around his business. And for profiting…or at least attempting to profit….from it. Supply and demand at that moment dictated the higher prices which were charged. Selling gasoline is a for-profit venture, not a charity event.
Comment by Jp — June 3, 2009 @ 9:04 am
Kristen, sounds like you have been to the oil fields in the southwest. For those have not and also believe that US oil companies are naive, this is what you will see. When prices are up, you can look out across the fields and see that virtually every pump is running. When the market is down, only one pump is running in each field. US companies will not sell their oil when the price is down, they let OPEC sell theirs.
Comment by allen bunch — June 3, 2009 @ 10:07 pm
Allen, I've lived in the midwest and spent time in Oklahoma and Texas,and you're exactly right. Oil prices are constantly and artificially manipulated every step of the way from the ground to the gas tank. There is no simple natural "supply and demand" effect.
Comment by Kristen — June 4, 2009 @ 6:49 am
It is an outrage that the gas station owner is being forced to make retribution of any type.
He owned a commodity which others did not have. He set a price and consumers willingly purchased at the offered price. Choices were available; buy gas elsewhere or don’t buy gas at all.
I applaud the owner for being on the ball and aware of what was going on around his business. And for profiting…or at least attempting to profit….from it. Supply and demand at that moment dictated the higher prices which were charged. Selling gasoline is a for-profit venture, not a charity event.
Comment by Jp — June 3, 2009 @ 9:04 am
Which is precisely why utilities like water and power are under govermental regulation as far as what they're allowed to charge for their "commodity".
Comment by Kristen — June 4, 2009 @ 6:52 am
@Kristen: "Which is precisely why utilities like water and power are under govermental regulation as far as what they're allowed to charge for their "commodity"."
True.. However, you can't drive 1/4 mile down the street to find another water or power company.
Comment by Jack — June 4, 2009 @ 7:42 am
"The Sheetz down the road ran out of gas temporarily, Citgo and Hess also temporarily ran out (they had/have very small tanks since they were/are older stores), and Chevron closed for the day."
True..However, sometimes you may have to drive more than a quarter of a mile down the street. When you get there will you find a Sheetz or another good businessman who has doubled his prices?
Comment by allen bunch — June 4, 2009 @ 12:16 pm