I'm Not Going to Pay a Lot for That Gasoline


Suppose you pull into a gas station and notice that the price for a gallon of regular unleaded seems awfully high—more than $4, compared to the $3.30 or so you're used to paying. If you're in a hurry, you might decide to pay the premium. If you have a couple minutes to spare, you might go to the station down the street where prices are lower. In Indiana, you would have a third option: Buy the gas and call the attorney general:

Three Hendricks County gas stations agreed to refund customers after Attorney General Steve Carter's inquiries about excessive pricing last week.

A Speedway and two Marathon gas stations on U.S. 36 set prices at $4.09 a gallon for regular unleaded gasoline for a period of time last Friday, sparking complaints to the attorney general's office. The stations agreed to provide customers with refunds of the difference between the market price at the time and the higher price—70 cents a gallon.

"These prices stuck out like a sore thumb and were clearly excessive in the marketplace," Carter said. "Our inquiry into the matter has resulted in an outcome favorable to customers."

"The system has worked," Carter added. "The attorney general's office is regularly monitoring gasoline pricing and the market pricing to ensure a quick investigation and review of excessive pricing reports. The stations involved have cooperated with our inquiry and recognize the need to provide customer refunds."

How does Indiana's gasoline czar know a station is guilty of "excessive pricing"? When its competitors are charging less. Possibly Indiana motorists, even without a crack staff of taxpayer-funded investigators, are also capable of gathering this information. They could, say, consult those gas station signs with the prices displayed in big numbers. If that takes too much effort, here's a website where they can do gas price comparisons without even leaving home. 

I don't quite understand where Carter gets the legal authority to dictate gasoline prices. His website explains the circumstances in which consumers should file an "incident report":

In 2002, the Indiana legislature adopted a law making it illegal to engage in excessive pricing during a state of emergency. The law is designed to prevent retailers from profiting at the expense of consumers should any emergency, like the September 11 tragedy, ever occur again. This law is triggered when the governor declares a state of emergency; the law can only be used while the state of emergency is in place and where there are insufficient cost factors to justify the increase. There is no specific percentage of price increase that is prohibited by the law. The law prohibits any price increase that "grossly exceeds" the price at which the gasoline was available before the emergency was declared.  

Is Indiana under a perpetual state of emergency?

[Thanks to Nicolas Martin for the tip.]