Soaring prices at the CT gas pump draw 200+ accusations of price-gouging. They’re difficult to prove.
Stephen Singer, Hartford Courant
5 min read
Accusations of price-gouging predictably follow the skyrocketing cost to fill up at the gas pump, but Connecticut officials can’t easily prove it.
The office of Attorney General William Tong said it has received 227 complaints of price-gouging, accounting for about 20% of the state’s 1,156 gas stations. His office investigated 103 that drew an “inquiry, a conversation, a visit from an investigator,” Tong said. Letters to gasoline retailers sought details on prices charged to customers and paid to suppliers, profit margins and other information.
Officials closed 50 cases with no action.
“We’ve gone through it in detail and concluded there’s probably not price gouging,” Tong said of the cases that were shut. “Not every price increase is gouging.”
No gas retailers in Connecticut have so far been cited for gouging. Tong said in an interview he wants to “give retailers a chance to explain.”
“They’re under a ton of pressure, too,” he said. “Most know it’s not OK to take advantage of their customers. They’re charged a lot by their suppliers.”
Defining gouging is difficult and lawyers instead cite an “unconscionably excessive” price, Tong said. The term is defined as a “gross disparity” between a seller’s price in the usual course of business shortly before a declaration of an abnormal market disruption and the seller’s price after the declaration.
It also requires that a gross disparity in price is not substantially related to an increase in the cost of obtaining or selling the good.
Tong announced in March an “abnormal market disruption” in gasoline prices triggering additional consumer protections against price gouging. The order was to expire April 2, but was extended to June 27. During an abnormal market disruption, it is unlawful to charge an “unconscionably excessive price” for energy, including gasoline, electricity and home heating oil.
In the last two weeks of May, the price of gasoline in the U.S. shot up 3%, to $4.62 a gallon, according to the U.S. Department of Energy. The cost of buying gas has been rising for months, pushed up initially by quickly rising demand after it fell during the pandemic, then continuing its relentless climb in February when Russia invaded Ukraine, roiling global markets.
Tong sought more authority to take action against price gouging. State lawmakers did not advance legislation this year that would have authorized the attorney general to take legal action against businesses accused of price-gouging during a disaster or emergency declaration.
“We want more robust price gouging authority, which they have not given us,” he said.
Retail sellers have not been responsible for price spikes generally and did not gouge, Tong said. Instead, wholesalers, suppliers or both are raising prices, forcing retailers to follow to earn the same profit or break even, he said.
Connecticut can not bring enforcement action against “culpable parties” because they are beyond the reach of state law that banned price gouging at the retail level in 1986, Tong said.
State Rep. Steve Stafstrom, a Bridgeport Democrat and House chairman of the Judiciary Committee, blamed minority Republicans for blocking the legislation.
“While this proposal would have strengthened our price gouging statute by enabling the office of the attorney general to act on behalf of consumers to bring enforcement actions against price gougers at higher levels of the supply chain, Republicans stood in firm opposition to this bill,” he said in an emailed statement.
Due to time constraints during the short legislative session “and this opposition,” lawmakers could not find a compromise to advance the measure out of the Judiciary Committee, he said.
State Sen. John Kissel of Enfield, the ranking Senate Republican on the Judiciary Committee, said Democrats, with majorities in the legislature, “have plenty of votes in the Senate and House to pass whatever bills they care about.”
Lawmakers disagreed about how price gouging is defined, whether it’s at a wholesale or retail level, he said.
State Rep. Craig Fishbein of Wallingford, the ranking House Republican on the Judiciary Committee, said the legislation was unclear about what would trigger an unreasonable price for gasoline. Like other commodities, gasoline fetches varying prices in short periods of time, challenging the attorney general’s office to “police the unpacking of those numbers,” he said.
Several business groups opposed the legislation.
Christian Herb, president of the Connecticut Energy Marketers Association, testified to the Judiciary Committee that the legislation is vague and “makes it impossible for a business to understand how they can price their products when they are accused of charging an ‘unconscionably excessive’ price.”
The American Petroleum Institute told lawmakers that “price gouging is complex — is challenging to prohibit legislatively — and its enforcement is equally nuanced and challenging.”
Michael Fox, executive director of the Gasoline and Automotive Service Dealers of America, said the last few years have been difficult for gasoline retailers. They were required to stay open during the pandemic when demand for gas plummeted as offices and most other businesses shut.
“We went to work when 50% to 60% of the business was not there,” he said.
As the COVID-19 vaccine was rolled out, gasoline retailers were rebuffed when they asked to be early recipients of the shot as a defense against returning customers who were infected, Fox said.
“We were told, ‘No, get in line,” he said.
Now prices are soaring and gas retailers face accusations of gouging, Fox said.
“That’s the life of a gas station owner in Connecticut and the U.S.,” he said.
