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I have a question that's been bothering me for years, or as long as I've been buying gas. I notice that whenever I hear about on the news that there is going to be a big increase in gas prices (for whatever reason) the gas stations all pop their prices up like THAT day, even though they must have paid less for all the gas that's still in their storage tanks. But when they report that there's going to a be a big drop in prices, it takes forever for those lower prices to show up at the pump. So is that price gouging and is it illegal in Massachusetts?

 
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Editor's Response

I have noticed the same thing, but I don't think the practice is illegal under normal circumstances.  In other words, if other local stations are charging $X a gallon, then a dealer can certainly charge that amount, even if it paid significantly less than $X for the gas.  However, if the gas station jacks up the price during a market emergency ("Any abnormal disruption of any market for petroleum products, including but not limited to any actual or threatened shortage in the supply of petroleum products or any actual or threatened increase in the price of petroleum products, resulting from severe weather, convulsion of nature, failure or shortage of electric power or other source of energy, strike, civil disorder, act of war, national or local emergency or other extraordinary adverse circumstances.") then they may violate a Massachusetts regulation prohibiting unfair and deceptive practice.  940 CMR 3.18 states:

 

1) It shall be an unfair or deceptive act or practice, during any market emergency, for any petroleum-related business to sell or offer to sell any petroleum product for an amount that represents an unconscionably high price.

(2) A price is unconscionably high if:

(a) the amount charged represents a gross disparity between the price of the petroleum product and

1. the price at which the same product was sold or offered for sale by the petroleum-related business in the usual course of business immediately prior to the onset of the market emergency, or

2. the price at which the same or similar petroleum product is readily obtainable by other buyers in the trade area; and

(b) the disparity is not substantially attributable to increased prices charged by the petroleum-related business suppliers or increased costs due to an abnormal market disruption.

Hope that helps.  For more information or to post a question, visit our Massachusetts Consumer Protection Law Discussion Forum.

 

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