Economy

Gas Pump Vaccine From Idaho AG

Idaho has a law that says it is not nice to raise prices during a crises (pandemic) and Attorney General Lawrence Wasden has a treatment.

Here is the press release explaining the details:

Attorney General Lawrence Wasden has announced a settlement agreement with three Idaho gas retailers following an investigation into their fuel prices during the state’s COVID-19-related state of emergency declared in March 2020.

The agreement addresses concerns raised by the Attorney General’s Consumer Protection Division. The settlement includes $1.5 million in consumer redress by way of sales credits to be provided in 2021.

Retailers Maverik and Jacksons Food Stores, Inc. will each provide $600,000 in credits and Stinker Stores, Inc. will provide $300,000.

As part of the settlement, none of the retailers admit to any wrongdoing. (EDITOR NOTE–this standard line always defies logic)
“I am pleased that we were able to address my office’s concerns and reach agreement on this matter, and in doing so, provide Idaho consumers with meaningful redress,” Wasden said. “The parties spent significant time analyzing, reviewing and negotiating. I want to commend the retailers for their willingness to be part of this solution.”

In March, federal and state emergency orders triggered the implementation of Idaho law governing the sale of food, water, fuel and pharmaceuticals during emergency declarations. Specifically, the statute prohibits selling those items at exorbitant or excessive prices while the declaration is in place.

Under the agreement, each company will earn credits by selling fuel at a price at which it can earn credits when the margin between the gas retailer’s retail price and the wholesale price for its product is less than the existing average margin of the states surrounding Idaho. For example, if the average margin in a given month between the retail and wholesale prices in the states surrounding Idaho is $.25 per gallon, and one of the retailers sells a consumer ten gallons of gas at a price with a margin that is $.15 per gallon, the retailer would earn a credit of $1 towards their redress obligation ($.10 x 10 gallons = $1.00).

The companies will have one year to satisfy their credit obligations, starting in January 2021.

Comments & Discussion

6 comments for “Gas Pump Vaccine From Idaho AG”

  1. Haven’t the three mentioned fuel retailers been price fixing forever?
    Jackson and Sinclair keep pricing the same in the same area of the city. How do you think Jackson’s is affording the extra mile arena name and Sinclair, Sun Valley? From their 32oz drinks?

  2. Bieter IS Gone, but we’re stuck with McLean
    Dec 1, 2020, 8:15 am

    We did nothing wrong, and we promise not to do it again.

    Walmart on overland has gas for $1.99.99. 1/2 mile west, Jackson’s is 2.27.99. No gouging there. And they won’t do it again – until next time.

  3. Blast from the past. Jim Jones used to periodically look into gas prices when he was AG. As I remember, that action alone got us a break. That said, my memory is faulty at times.

  4. David Gustafson
    Dec 2, 2020, 1:08 am

    This action by the AG is harmful meddling in the free market. Anti-gouging laws hinder valuable pricing signals that improves emergency response – pricing that prevents hoarding. “Gouging” ensures limited resources are distributed the in most valuable manner. It ensures generators in a hurricane are used for hospitals and schools, not beach houses. Imagine if stores could raise the price toilet paper according to demand; it may prevent the mindless hoarding we’ve seen this year. This fuel case makes no sense as gas consumption dropped dramatically this spring, resulting in large drops of wholesale prices to record lows. Most stations are always slow to change prices, taking advantage of the lack of awareness of typically shoppers on the drop, but suffering on the rise to prevent losing customers. This accounts for the large gap between wholesale and retail pricing. In any case, these retailers could not effectively manipulate the market as there are many other retailers who use a different pricing model, including Walmart, Costco, and Fred Meyer. Gas is a true commodity, making it difficult to manipulate the market. Wasden should focus on the Idaho wholesale prices, which ARE impacted by a pipeline monopoly, and leave the retailers alone.

  5. @ David G. Thanks and agree.

    When another retailer down the street has gas for 10% less there is not illegal gouging, rather the free market at work and consumers should make an educated purchase and not cry for the government to save themselves from their own purchasing decisions.

    Free market works well when there is competition, and you are right the wholesale gas situation lacks competition, not the retail part.

    Government’s role should be to ensure competition exists (via anti-trust acts) and otherwise not interfere in the free market and consumer decisions.

    The AG is at its basic level a politician who must appeal to the masses for re-election, thus the emphasis on consumer retail where the voter has their experience.

    Some gas prices are retailers trying to distinguish themselves with “valuable” fuel additives, or non-ethanol fuel for a premium. Real or perceived, they try to obtain a premium for the “benefit”, not price gouging.

  6. I’m betting that gas will still be more expensive next year. Even with these credits.

Post a comment

Get the Guardian by email

Enter your email address:

Categories