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Norwalk gas station settles allegations of Storm Sandy-related price gouging

Norwalk's Connecticut Avenue Shell gas station has paid a fine to the state of Connecticut, the Department of Consumer Protection said,
Norwalk’s Connecticut Avenue Shell gas station has paid a fine to the state of Connecticut, the Department of Consumer Protection said.

By Nancy Guenther Chapman

NORWALK, Conn. – A Norwalk gas station accused of price gouging in the aftermath of Superstorm Sandy has paid a fine to the state, according to a press release from the Department of Consumer Protection.

Gas prices at the Connecticut Avenue Shell station, next to Stop & Shop, rose 10 cents a gallon on Nov. 1 without a corresponding increase in wholesale gas prices, the release says.

“Given that the state was in a period of abnormal market disruption due to the severe impact of Storm Sandy, we determined that the Shell station’s 10-cent per gallon increase was not justified and constituted an unconscionably excessive price for gasoline,” Consumer Protection Commissioner William M. Rubenstein said in the release.  “The retailer sold 4,830 gallons of gasoline that day at the increased price, but we are requiring him to disgorge three times the amount of that unfair profit.”

State law prohibits fuel suppliers from charging unconscionably excessive prices during times of abnormal market disruptions, such as storm-related disasters, the release says. While the station does not admit to any wrongdoing, it entered into the agreement, which requires it to pay $1,449 to the Department of Consumer Protection for its complaint resolution, education and enforcement programs, according to the release. In addition, Connecticut Avenue Shell agrees to comply with the letter of Connecticut’s anti-profiteering law, which protects consumers from improper price increases during emergencies and disasters.

“Connecticut will not tolerate unfair pricing from those who would take advantage of the misfortunes of others in times of disaster,” Rubenstein said in the release. “Furthermore, would-be profiteers will not profit from their actions; the monetary payment in this case is triple the amount of the excess profit extracted by the price increase.”

A statutory notice of an “abnormal market disruption” under Connecticut General Statutes Section 42-234 means that dealers are prohibited from charging unconscionably excessive prices for energy resources such as heating oil, gasoline, propane, natural gas, electricity and wood fuels, among others. Violators are subject to penalties. See CT General Statute § 42-234 and Public Act 12-4.

An “unconscionably excessive price” may occur when there is a gross disparity between the price during the market disruption and the price in the ordinary course of business immediately prior to the market disruption and the price is not attributable to additional costs.

In the release, Rubenstein thanked Inspector William Timko and Supervising Inspector James Turner for their work on this investigation.

Reports of suspected price gouging for consumer goods or unconscionably excessive pricing of gasoline or other fuels can be made to the Department of Consumer Protection at [email protected]. Consumers may also call the department’s toll-free hotline at 1-800-842-2649.

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