Sen. Brad Hoylman, D-New York City, wants to include fuel in the state’s anti-price gouging statutes.
S.9002 was introduced shortly after gas prices hit their 2022 peak in New York state. As was reported earlier this week, gas prices have begun to decrease.
“The Russian invasion of Ukraine has provided an abnormal disruption of the market for fuel, among other commodities,” Hoylman wrote in his legislative justification. “Oil and gas companies have used this disruption to increase fuel prices on consumers, most notably at the gas pump. This legislation would make clear that price gouging fuel due to abnormal disruptions like war is illegal under New York law, and it would confirm the Attorney General’s statutory to investigate and bring action against price gougers.”
Proving price gouging can be difficult, according to the Empire Center for New York State Policy, due to the difficulty proving what constitutes an “unconscionably excessive” price increase. State Attorney General Letitia James launched a rulemaking process in March to attempt to clarify the matter, but that process hasn’t yet concluded.
James said her rulemaking process would investigate corporations she said used the pandemic as an excuse to charge more for necessary goods, such as gas and oil, food, and cars. She specifically cited beef prices increasing 30% as meat-packing companies profits increased; the cost of Proctor and Gamble diapers, toothpaste, detergent, and tampons rising throughout the pandemic while Proctor and Gamble boasted record-breaking profits and the rise in shipping prices while shipping company profit margins increased.
“The rising costs of essentials and basic household items has had a real impact on working families,” James said in March. “Throughout the pandemic, hardworking New Yorkers have been struggling to make ends meet, but big corporations have been celebrating record breaking profits. It doesn’t add up. My office is prepared to use every tool in our toolbox to crack down on price gouging and pandemic profiteering.”
PRICE GOUGING, OR ECONOMICS
A recent Associated Press report cited economists who reasoned corporate price gouging is, at most, one of the causes of runaway inflation instead of the primary reason.
They include: Supply disruptions at factories, ports and freight yards. Worker shortages. President Joe Biden’s enormous pandemic aid program. COVID-19-caused shutdowns in China. Russia’s invasion of Ukraine. And, not least, a Federal Reserve that kept interest rates ultra-low longer than experts say it should have.
Most of all, though, economists say resurgent spending by consumers and governments drove inflation up.
Asked to name the culprits behind the spike in gasoline prices, 72% of the 1,055 Americans polled in late April and early May by the Washington Post and George Mason University’s Schar School of Policy and Government blamed profit-seeking corporations, more than the share who pointed to Russia’s war against Ukraine (69%) or Biden (58%) or pandemic disruptions (58%). And the verdict was bipartisan: 86% of Democrats and 52% of Republicans blamed corporations for inflated gas prices.
“It’s very natural for consumers to see prices rising and get angry about it and then look for someone to blame,” said Christopher Conlon, an economist at New York University’s Stern School of Business who studies corporate competition. “You and I don’t get to set prices at the supermarket, the gas station or the car dealership. So people naturally blame corporations, since those are the ones they see raising prices.”
GAS PRICES DROPING
The average price is a bit lower in Western New York, ranging from $4.76 in most of Chautauqua County to $4.72 in the Batavia area.
Early last week, unleaded gasoline dropped below $5 a gallon at about 80% of gas stations across the country as oil prices dropped amid broad market concern regarding a potential slow, or even stall, of economic growth due to rising interest rates and inflation. A lower economic growth rate than expected could cause crude demand to further decline, leading pump prices to follow suit. On Monday morning, oil prices are at $103 to $105, down slightly from the $103 to $107 per barrel seen a week ago.
Data released July 6 by the Energy Information Administration showed that gas demand sat at 8.93 million barrels a day, which was lower than last year’s rate of 9.11 million barrels a day at the end of June. On the other hand, domestic gasoline stocks increased by 2.6 million barrels of petroleum liquids to 221.6 million barrels of petroleum liquids. These supply and demand dynamics, along with decreasing oil prices, have pushed pump prices lower. If these trends continue, drivers will likely continue to see relief at the pump.
“The national average has declined for 27 days straight, or four weeks, the longest decline in average gas prices since the pandemic started in 2020. Average gas prices are down nearly 40 cents, with Americans shelling out $140 million less on gasoline every day than they did a month ago,” said Patrick DeHaan, head of petroleum analysis at GasBuddy. “We may see the trend last a fifth week, as long as oil prices remain cooperative and don’t arise beyond $105 per barrel, and as long as refinery production of gasoline remains strong. But we’re not completely out of the woods yet – we could also see a sharp reversal in the decline. There remains risk of a spike in prices that could send us to new record levels in August, should any disruptions occur. It could be a wild ride, but for now, the plummet at the pump shall continue.”