Regulation

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

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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.]

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  1. I doubt the AG had any authority to enforce lower prices, but he certainly had the visibility to make a media stink for the gas station owners.

  2. On 9/11/01, there was panic amongst the Hoosier clems. Many stations in Indianapolis, Marathon stations in particular, jacked up prices significantly, like by a factor of three or more, as I recall. There were fistfights in the gas lines.

    That, I believe, was the rationale for the “profiteering” law. As for whether it is justified, or whether the clems are too fucking feckless to look up at the big price sign and consequently must be protected from their own laziness, I will not say.

  3. Is Indiana under a perpetual state of emergency?

    Yes, and the emergency is the extreme foolishness of their AG.

  4. Are these gas stations near a major airport?

    I know that in Florida and in LA there are a couple of gas stations right near rent-a-car dropoff points at major airports where the station regularly charges $1 or so more than the “market rate”.

    They know they can do this because people want to fill up at the last possible moment before dropping off their rental cars.

    Of course, the reason they can do this is because rental car companies typically charge huge premiums to gas up cars that are dropped off with less than a full tank of gas, so the “competition” for these gas stations isn’t really other gas stations – it’s the gas price charged by the rental car companies.

  5. I think it would be helpfull for the consumers information gathering process if every gas stations prominently displayed the dollar amount of federal and state gas taxes that are included in the price per gallon they are currently selling gas for.

  6. “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.”

    This is so fucking stupid the mind boggles.

    Hey there Mr AG, Ernie’s charged me $3.25 for a Budweiser and Bob’s only charges $2.50. Can you do something about that? I don’t want to stagger all the way to Bob’s.

  7. The law prohibits any price increase that “grossly exceeds” the price at which the gasoline was available before the emergency was declared.

    Because, you know, it’s not like an emergency could quickly change the value of gasoline.

  8. I saw this earlier on Yahoo news:

    http://news.yahoo.com/s/nm/20080320/pl_nm/energy_obama_dc;_ylt=AlZygGxRLO.gCzkgJyMe8vFh24cA

    “Democrat Barack Obama would take an active role in U.S. oil markets as president, tackling concerns about the dominance of large oil companies and eyeing the Strategic Petroleum Reserve as a potential weapon to combat high prices, his top energy adviser said. “

    So now I can say: A black Hugo Chavez.

  9. J sub D wrote, “Hey there Mr AG, Ernie’s charged me $3.25 for a Budweiser and Bob’s only charges $2.50. Can you do something about that? I don’t want to stagger all the way to Bob’s.”

    Whaddaya want? The AG already enabled you afford to drive to Bob’s with the refund you got on gasoline. Get in the car and quitcher whining!

  10. Who woulda thought that Indiana of all places would be so European.

  11. “Now let me state the present rules,”
    The lawyer then went on,
    “These very simple guidelines,
    You can rely upon:
    You’re gouging on your prices if
    You charge more than the rest.
    But it’s unfair competition if
    You think you can charge less!”
    “A second point that we would make
    To help avoid confusion…
    Don’t try to charge the same amount,
    That would be Collusion!
    You must compete. But not too much,
    For if you do you see,
    Then the market would be yours –
    And that’s monopoly!”

  12. Is Indiana under a perpetual state of emergency?

    Given that they’re now being invaded by former residents of Illinois who’ve decided they don’t want to live with the liberal government they’ve elected – yes!

    So now they move to Indiana, and vote for the same policies that made Illinois unbearable. Go figure.

  13. Yeah, that was stupid, but this is even dumber.

    Also, the AP’s archive search sucks, unless it was just user error.

    Er?k Boston, Pre-Esq., that was brilliant.

  14. I doubt the AG had any authority to enforce lower prices, but he certainly had the visibility to make a media stink for the gas station owners.

    Yes, but what if they are price gouging? The oil companies are doing this, this is why the price of gas is high. Americans way of life is non-negotiable, we have got to have cheap gas so we can all drive big SUVs.

  15. I got gas at one of those stations near the airport that was charging an extra $1 per gallon. My girlfriend complained about it and went inside to argue. The cashier said they get lots of complaints but that’s what the owner set the price at. Sorry. Then my girlfriend yells at me. I said, “Hey, it’s close to the airport, I figure other nearby stations are also charging more and we need to catch our flight. And I was willing to pay it.”

    At the airport, my girlfriend passed on McDonald’s for the $9.95 burger at Charleston’s. I didn’t say a word.

  16. “These prices stuck out like a sore thumb and were clearly excessive in the marketplace,” Carter said.

    Then they should have been very easy to avoid, no?

    Oh right, if they do it, then everyone will. Everyone knows that’s how marketplaces works; by being exactly like your competitors.

  17. “At the airport, my girlfriend passed on McDonald’s for the $9.95 burger at Charleston’s. I didn’t say a word.”

    But, but gasoline is “special” don’t you know?

    It is in a sacred category apart from all other consumer goods. Everyone is “entitled” eternally cheap gas becuase it says so in the Constitution – or something like that.

  18. Thanks Shawn….here’s a link to the full poem. It’s a classic critique of govt market controls.

    http://www.michaeljosephradzicki.com/bread.htm

  19. You cannot expect politicians to stand idly by while consenting adults engage in such acts…

  20. “The stations involved have cooperated with our inquiry and recognize the need to provide customer refunds.”

    …noted the Attorney General, as he cooly stroked the pearl handle on the revolver of government.

  21. I’m so glad I don’t live in Indiana any more.

  22. Oh right, if they do it, then everyone will. Everyone knows that’s how marketplaces works; by being exactly like your competitors

    Like the airlines

  23. Is Indiana under a perpetual state of emergency?

    Yes. Just try living here; you’re under constant assault from the sheer stupidity surrounding you.

  24. Like the airlines

    Do you mean the industry where there is fairly intense price competition? The one where some have personal headrest screens for each customer and others are considering in-air Internet?

    Yes, just like that.

    Don’t get me wrong, there are many stupidly run companies out there. Some even fly jets as a business.

  25. Whaddaya want? The AG already enabled you afford to drive to Bob’s with the refund you got on gasoline. Get in the car and quitcher whining!

    I took your advice. Know any good DWI attorneys?

  26. I’m embarrassed to be a Hoosier.

  27. If I were those gas station owners, I would have filed a complaint against the other stations accusing them of “predatory pricing”.

  28. noted the Attorney General, as he cooly stroked the pearl handle on the revolver of government.

    Oh, I don’t think that’s what he was stroking.

  29. If your price is too high, you’re “gouging.”
    If your price is too low, you’re “dumping.”
    If your price is the same, it’s “collusion.”

    It just goes to show you, no matter what business does, it’s evil.

  30. Is Indiana under a perpetual state of emergency?

    To me, it looks like it’s more or less permanently under the State of Michigan. (As long as I keep North at the top.)

  31. “I think it would be helpfull for the consumers information gathering process if every gas stations prominently displayed the dollar amount of federal and state gas taxes that are included in the price per gallon they are currently selling gas for.”

    http://www.indianagasprices.com/tax_info.aspx

    50.1 cents total, including federal.

  32. I have an idea! Let’s go all the way and enact price controls, so no one will ever have to worry whether they’re charging “too much”. That couldn’t possibly have any bad consequences whatsoever, right?

    Seriously, I think these prices have far more to do with a relative scarcity of oil, partially enforced by the government-run oil companies of OPEC nations than with gouging by US oil companies or, especially, gas station owners.

  33. “As long as I keep north on top”
    THE SOUTH WILL RISE AGAIN!!!!!!
    Sorry, but I had to say it.

  34. They could, say, consult those gas station signs with the prices displayed in big numbers.

    The overnight host on WBZ mentioned that a similar thing almost happened to him in Florida. There was no sign “with the prices displayed in big numbers”. He only saw the price after he pulled in and went to swipe his card. As Fluffy pointed out, it was the last gas station before the car rental drop off point.

    However, filling up just before returning a car rental may become pointless in the future. Several rental companies are starting to charge an additional fee if you return the car with a full tank.

  35. Several rental companies are starting to charge an additional fee if you return the car with a full tank.

    WTF?

  36. WTF?

    He Trolls so nice, he initialed it thrice.

  37. TTT beat me to the exact link.

    Had a little trouble with the posts there. If the website crashes, just remember that you haven’t heard anything from any Canadians lately.

  38. Speaking of Canadians, thanks ever so much for helping knock Mexico out of the Olympics and then laying down for the US tonight. Excellent!

    “Don’t Give Up the Ship!”

  39. Timon19 | March 20, 2008, 11:19pm | #

    Speaking of Canadians, thanks ever so much for helping knock Mexico out of the Olympics and then laying down for the US tonight. Excellent!

    “Don’t Give Up the Ship!”

    ?

    Since I have no idea what you are referring to, other than some team sports competition, I will merely once again congratulate the US on its two hockey silver medals in the Salt Lake Olympics.

  40. Soccer. Olympic Qualifying. US 3:0 Canada.

    US to Beijing. Canada back north of the 49th.

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