When it comes to gasoline price increases, how much do prices have to rise before a price increase is “unconscionably excessive”? What difference between prices before and after a declaration of emergency is large enough to create a “gross disparity”? Twenty percent? Ten percent? Five?
A Norwalk Shell gasoline station has signed an agreement with the Department of Consumer Protection and has paid $1,449 to the agency to settle allegations that the station raised its retail gas price by 10 cents per gallon on November 1, 2012, without there being a corresponding increase in wholesale gas prices for that day. The conduct occurred in the immediate aftermath of Storm Sandy. State law prohibits fuel suppliers from charging unconscionably excessive prices during times of abnormal market disruptions, such as storm-related disasters.
The Shell station is known as Connecticut Avenue Shell and is located at 307 Connecticut Avenue, Norwalk. While the station does not admit to any wrongdoing, it entered into the agreement, which requires it to pay $1,449 to the Department of Consumer Protection for its complaint resolution, education and enforcement programs.
Assuming the price was $4.45 for the days leading up to November 1, the 10-cent change constituted a 2.25 percent increase in the price charged for regular unleaded gasoline at the station.
No doubt the retailer concluded that $1,449 was less than its lawyers would have charged to fight the allegation, and so it took the commercially expedient route of settling with the state. Still, the settlement puts a pretty tight cap on future retailers who may wish to raise prices during times the state has asserted a market disruption.