By Senator Joseph Griffo
(Rome, NY – Dec. 2014) When I filled up my gas tank today, the price was $2.99 per gallon at my local station near Utica. Fifty miles east in Syracuse, the price is between 20 and 28 cents cheaper per gallon.
Why is there a discrepancy?
In 2008, I voted for a ban on “zone pricing,” which had allowed wholesalers to increase profits by charging retailers different amounts for fuel based on competition, volume of traffic, affluence of nearby neighborhoods and all sort of other vague reasons. I was trying to protect the consumer by standardizing the cost at the pump statewide.
The bill passed the Legislature and then-Gov. David Patterson signed it into law.
Unfortunately, the lawyers screwed it up.
The state Attorney General told us in late 2011 that he found evidence that some wholesalers were continuing to charge different prices to different retailers, in violation of the law we had passed. However, the ban had been used to prosecute companies exactly zero times.
The problem was – and still remains – a couple of key phrases. The law prohibited wholesalers from charging different prices within a “relevant geographic market,” but failed to adequately define that term. It also prohibits “arbitrary” price differences, which made enforcement impossible. Wholesalers argued the price differences weren’t “arbitrary,” but instead based on sound business-related reasons, such as competition, cost of operation and so on.
We’ve been trying to put some real teeth into this law for a while, but with limited success. I credit Assemblyman Anthony Brindisi for bring this issue to the public’s attention again and I’m committed to helping him achieve a successful resolution for his bill on the Senate side. I believe as I did before: The best way to protect the consumer is to prohibit wholesalers from padding their profits based on factors that are not transparent to either station operators or customers.