N.J. AG says gas station raised prices in wake of Hurricane Irene

Bryan Cohen Dec. 27, 2011, 11:14am


NEWARK, N.J. (Legal Newsline) - New Jersey Attorney General Paula Dow announced a lawsuit on Thursday against a Sussex County gas station for alleged price-gouging following landfall by Hurricane Irene in August.

Thakur Gas LLC, doing business as Lukoil, allegedly raised prices by more than 10 percent immediately following the landfall of Hurricane Irene. The Division of Consumer Affairs filed suit Wednesday against the company, naming Ranbir Singh as the company's initial member and registered agent.

The lawsuit alleges that the station charged excessive prices 488 times for motor fuel on Aug. 29.

"Taking advantage of those recovering from devastating disasters is despicable conduct," Dow said. "The alleged price-gouging committed by this gas station took hard-earned money from storm victims who bought fuel to power generators, chainsaws, and other equipment."

Gov. Chris Christie declared a state of emergency for all of New Jersey on Aug. 25. New Jersey law states that price increases are excessive if they are more than 10 percent higher than the price at which a service or good was sold in the usual course of business prior to the state of emergency. If added costs are imposed by a supplier, prices are considered excessive if a seller's markup from cost increases by over 10 percent compared to immediately prior to the state of emergency.

The suit alleges that the defendant charged an excessive price for regular-grade gasoline after the declaration of the state of emergency because the cash price rose to $3.999 per gallon from the $3.399 per gallon that was charged immediately prior to the state of emergency. The change represented a 17.65 percent increase.

The alleged price increases included the cash price for plus-grade gasoline increasing from $3.599 per gallon to $4.199 per gallon, a 16.67 percent increase, and an increase in premium-grade gasoline from $3.699 per gallon to $4.299 per gallon, a 16.22 percent increase. In addition, the lawsuit alleges that the pump prices exceeded the allowable 10 percent markup even after factoring in the higher fuel costs the station paid its wholesaler.

The lawsuit was filed in State Superior Court in Sussex County and is the first case of alleged price gouging related to Hurricane Irene brought by the division. Price gouging violations are punishable by civil penalties of up to $10,000 for the first offense and $20,000 for the second and subsequent offenses. Each individual sale of merchandise is considered a distinct and separate event.

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