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Six gas stations cited for price gouging

Posted October 20, 2008

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— The owners of a Fayetteville gas station and five stations in Cherokee and Clay counties have agreed to repay customers who bought overpriced gas last month, Attorney General Roy Cooper said Monday.

Cooper also filed suit against the owner of a Montgomery County station he accused of price-gouging in the wake of Hurricane Ike.

In the days before and after Ike hit the Texas Gulf Coast on Sept. 13, pump prices across North Carolina skyrocketed amid fears that the storm would cripple U.S. refining capacity and create gas shortages.

Thousands of drivers complained to the Consumer Protection Division in Cooper's office that prices went up too high and too fast.

"We got thousands of phone calls from consumers who were understandably upset," Cooper said.

The Attorney General's Office subpoenaed the owners of 26 stations statewide, demanding information on their wholesale prices and the retail prices they charged. Cooper said stations could not be cited under North Carolina's price-gouging law if they were simply passing along their higher prices.

The Circle B station on McPherson Church Road in Fayetteville raised its prices from $3.99 to $5.49 a gallon for regular unleaded on Sept. 12, overcharging customers by more than $1,000 in a five-hour period, Cooper said.

"The price rise was pretty dramatic over a short period of time," customer Peter Deveaux said.

Station owner Dilip Gala agreed to refund $1.50 a gallon to customers who bought gas at the station that day. Credits will appear on the monthly statements of drivers who used a credit card, and drivers who paid cash will have 30 days to present a receipt or other proof of purchase to the station for a refund.

"Good idea, more refund, more money," Deveaux said.

Five Big D stations in Murphy, Marble and Hayesville overcharged consumers $2,320 on Sept. 12 and 13, marking up gas to $4.99 per gallon, Cooper said.

Samuel W. Duncan Sr., president of Big D, agreed to refund customers based on the grade of gas purchased and the station where it was bought. Those who paid cash have 30 days to present some proof of purchase to the station for a refund, while those who used credit cards will get a credit on their monthly statement.

Circle B also will also pay $5,000 in civil fines to the state, while Big D will pay $10,000 in fines. The money will go to North Carolina public schools.

Both companies must provide the Attorney General’s Office with an accounting of all refunds made to consumers. Any amount that is unable to be returned to consumers will go to a fund to provide energy assistance to people in Cumberland, Cherokee and Clay counties, Cooper said.

“When families are struggling to make ends meet, the last thing they need is to be gouged at the pump,” he said in a statement. “These stations are making things right for consumers and other stations should do the same.”

The Attorney General's Office was unable to reach an agreement with Steve Compton, the owner and manager of Tire Pro, also known as Troy BP in Troy, so Cooper filed suit against the station. The suit alleges that the station raised its prices to $5.98 per gallon on Sept. 12, meaning that its profits rose from about 14 cents per gallon to at least $2.23 cents per gallon.

The suits seeks a court order that the company pay refunds to consumers and civil penalties to the state.

Cooper said the price-gouging investigation was ongoing and he expected to reach more action against gas stations accused of price-gouging.

“We put our price gouging law in place not only to punish wrongdoers, but also to serve as a deterrent,” he said. “Consumers are our eyes and ears out there, and we appreciate their help spotting and reporting possible gouging.

"We believe there was price-gouging going on out there, and I think you will see future agreements and future legal action against these stations as well."

72 Comments

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  • whatusay Oct 21, 2008

    haggis basher... anyone can sell anything for any price, except in times of a crisis. When greed exceeds human decency this country will be doomed. But, with people like you it will be sooner than we can imagine.

  • ncredneck4ever Oct 21, 2008

    "suppose you were in the desert with 20 other people and you had enough water to keep everyone alive. However, you let 19 die because the richest person paid you for all the water. Would that be a crime?"

    did i let the people die? or did the rich man let them die when he withheld the water from them? if he owns the water, letting the rest of the people die will be his shame, not mine. why would i sell him all the water if i need water myself to survive anyways?

    "Same with gas, everyone must have it to survive because transportation is a necessity. Gas is not a luxury item that some can buy and others can't. This country is dependent on gasoline."

    necessity or not, when demand for something is high and its availability is curtailed, it will be a luxury for those who already have it or those who can pay the most for it. prepare for that.

  • haggis basher Oct 21, 2008

    "Same thing with hurricans and gougers selling generators, water, and food for 2-3 times what it is worth. It is against the law."

    The law is just plain dumb. Written by dumb politicians to keep dumb voter happy. Why would you load up a trailer with water, generators, gas etc and rush down to, say, New Orleans to supply such things if you can sell them for the same price at home?......We could of course leave such work to charities and the Gov. and we all know how well that works.......

  • haggis basher Oct 21, 2008

    It is clear from most posts here that the US education system is failing miserably at teaching even the basics of economics and capitalism. Price control is what Socialist and other dumb Govs do and it always messes up the market and everyone suffers in the long run.
    The gas is owned by the gas stations and they can sell it for exactly what they like so long as they are in free competition with many other suppliers. They are not a monopoly so no gouging laws are appropriate. It could be argues that the gouging laws were responsible for the temp shortage. All the gas was in folks tanks rather thyan in the Gas stations. A higher price would discourage folks from topping up and then those that "needed" gas would have been able to get it, albeit at a higher cost, rather than finding empty pumps.

  • boingc Oct 21, 2008

    "Greed and shame...This makes me even that much more ashamed to be here in NC"
    Becca70

    Well then leave...

  • GeorgiaPeach70 Oct 21, 2008

    Greed and shame...This makes me even that much more ashamed to be here in NC...We have an"education lottery" but yet our schools are having to quit projects because there is not enough money...We have high taxes, but yet our roads are still no good...This is a GREEDY state!!!!!

  • GeorgiaPeach70 Oct 21, 2008

    I am glad to see these stations being punished for the WRONG price gouging that went on...SHAME ON YOU!!!!!!

  • whatusay Oct 21, 2008

    "the "true price" of gas is whatever people will pay for it."ncredneck4ever...

    suppose you were in the desert with 20 other people and you had enough water to keep everyone alive. However, you let 19 die because the richest person paid you for all the water. Would that be a crime? Same with gas, everyone must have it to survive because transportation is a necessity. Gas is not a luxury item that some can buy and others can't. This country is dependent on gasoline. An occassional shortage does not give anyone the power to be king for a day and charge whatever they want. Same thing with hurricans and gougers selling generators, water, and food for 2-3 times what it is worth. It is against the law.

  • ncredneck4ever Oct 21, 2008

    the "true price" of gas is whatever people will pay for it.

  • Anne N Oct 21, 2008

    good

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