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Governor Rell: State Probing Gas Price Spikes at Cumberland Farms, Other Retailers.

Governor M. Jodi Rell today directed the Department of Consumer Protection (DCP) to subpoena records from Cumberland Farms Inc. after the Governor's Office and the DCP received numerous, specific complaints about a sudden increase in gasoline prices at the company's stores.

Governor Rell also announced that subpoenas are being prepared for several other gasoline companies and said her Administration is crafting specific language to define "price gouging" and make it easier to investigate and prosecute suspected profiteers.

"Customers are fed up when they fill up," the Governor said. "Gasoline fuels more than our cars and trucks - it really powers our economy. From the simple need to get to and from work to the ability to move goods across the state, these price increases have a tremendous ripple effect on residents and businesses. I have made it clear that I will move aggressively to investigate allegations of price gouging at all levels. We owe it to the consumers, whose wallets are increasingly running on nothing but fumes."

The hot line the Governor established last week to take reports of possible price gouging (800-842-2649) had received more than 500 complaints by Tuesday morning. The calls involve price increases ranging from a few cents per gallon to more than 40 cents per gallon.

About a third of the complaints concern a sudden increase of as much as 48 cents per gallon in retail prices at Cumberland Farms outlets. Cumberland Farms retailers have told motorists the increases stem from major spikes in the costs they were paying for wholesale gasoline deliveries.

"Economists and industry-watchers have warned that price increases in some areas are inevitable," Governor Rell said. "We know that Hurricane Ike's blow to the Texas Gulf Coast affected about 20 percent of the nation's refining capacity. However, hard-pressed Connecticut consumers deserve to know all of the facts, including why the spike at Cumberland Farms appears so much larger than at other gas stations around the state. We intend to make certain any price increases in Connecticut are the natural result of a disaster like Hurricane Ike and not an attempt to take advantage of consumers."

The subpoenas for Canton, Massachusetts-based Cumberland Farms seek information about the chain's daily wholesale prices from the past two weeks, as well as information on the dates and times of wholesale deliveries. Subpoenas are also going to Cumberland Farms retailers seeking similar information.

The Governor said she has directed DCP to prepare additional subpoenas for information about price increases at gas stations operated under the Citgo, Valero and Getty or Lukoil brands.

"People need to be careful not to immediately blame the local gas station owner," the Governor said. "While there may be cases of alleged price-gouging by individual gas stations, almost all retailers make only a few cents per gallon even as 'Big Oil' racks up unprecedented profits. The gas station owners must pay credit card fees and other costs - yet they must also react to increases in wholesale prices that they cannot control. That is why our subpoenas focus on wholesalers and 'Big Oil' as well as local prices."

Governor Rell said she plans to contact a wide range of experts, including retail-level dealers, to set a firm standard for defining 'price gouging,' especially in volatile markets such as retail gasoline. Legislation to revise the standards would be offered when the General Assembly meets next year.

Link to Governor Rell: State Probing Gas Price Spikes at Cumberland Farms, Other Retailers

Content Last Modified on 9/16/2008 3:39:35 PM



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