FTC numbers spur Sanders allegation that big gas station owners are gouging customers

Photo by Ceilidh Galloway-Kane

Photo by Ceilidh Galloway-Kane

Gas prices in Burlington are well above state and national averages, and have been creeping above Federal Trade Commission predicted price ranges since May, according to Sen. Bernie Sanders’ office.

The average price of gas in Vermont today, the office said, is $3.53. In Burlington, consumers were paying an average of $3.68 as of June 30.

Burlington is one of 360 cities around the country where gas prices are tracked by the Federal Trade Commission.

Sanders’ office said the FTC released data to the senator that revealed gasoline prices in Burlington in June were as much as a dime to 43 cents greater than a Federal Trade Commission computer model projected. In a statement, Sanders said the data showed Burlington gas prices were 15 cents to 29 cents higher than prices charged by gas stations in other Vermont towns only about 35 miles away.

Mitch Katz, an FTC press officer, said the commission received a letter from Sanders regarding the fuel prices and they they take such letters very seriously and were working on a response.

The FTC does not generally publicly comment on pending investigations because such an announcement could affect the market.

Attorney General Bill Sorrell said he had noticed a discrepancy in prices and had heard from some consumers on the matter as well. He said that while the issue can be frustrating, it often doesn’t add up to a crime.

“We, in the past, with the Federal Trade Commission, have been involved in looking at gas prices in the area. And quite simply if different gas stations look out the windows and see what their competitors are charging and decide to charge that amount, that is not a violation of our laws,” he said.

That doesn’t mean the Attorney General’s office won’t keep an eye out. Collusion, the act of collaborating with would-be competitors to set artificially high prices, would be hard to prove even if it was at work in a situation like this one, Sorrell said. While he wasn’t aware of any formal consumer complaints and said he had no evidence of a crime, he said the office hasn’t written off the issue.

“If we got any compelling evidence, we would be in touch with the federal authorities very fast,” he said.

Sanders says four companies own 58 percent of the gas stations in the Burlington market and hints this might be the reason for the discrepancy in prices.

“Prices here in the Burlington area and other parts of Vermont are much higher than they should be,” Sanders said. “So far, no one has given me a particularly good explanation. People who own service stations have a right to make a profit,” Sanders said. “They don’t have a right to rip people off,” he added.

Joe Choquette, a spokesman for the Vermont Petroleum Association and American Petroleum Institute, said market forces are the only cause.

“I would say that we think it’s a competitive market, and what’s at work are the forces of supply and demand and competition,” he said.

Why would competition lead to higher prices in one area? Choquette said distribution networks may be to blame.

Gas stations all over the state get their fuel from terminals that offer petroleum with various brands’ additive packages. One of the terminals serving Vermont is in Albany, N.Y. Another is in Burlington.

“If you were to drill down and get the prices for the same product at the various terminals, you’ll find in general the price per gallon of the product in Burlington is about 5 cents higher per gallon than the price in Albany,” Choquette said.

Areas in the southern part of the state may be served by the Albany terminal, and there are also terminals in Portsmouth, N.H., Portland, Maine and Springfield, Mass.

The varying sources of fuel cause a large variation in fuel prices across the state, Choquette said.

“I would say that we think it’s a competitive market, and what’s at work are the forces of supply and demand and competition,” Choquette said.

Taylor Dobbs

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4 Comments on "FTC numbers spur Sanders allegation that big gas station owners are gouging customers"

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David Usher
4 years 1 month ago
In a recent trip to Boston, gasoline was 40 cents cheaper in NH and 20 cents cheaper in Boston suburbs than in the Burlington area. This has not been the case in the past. Pump prices were generally higher in MA than in VT. We need a simple analysis published regularly that will compare retail prices, wholesale prices, federal tax, state/local tax per gallon from Burlington and other nearby markets. This will allow us to see where the discrepancies lie. Trudging around the Internet to find this information is a hassle. Can some enterprising investigative journalist please oblige? I don’t… Read more »
JED Guertin
4 years 1 month ago
Mr. Choquette’s statement is reasonable on its face. “If you were to drill down and get the prices for the same product at the various terminals, you’ll find in general the price per gallon of the product in Burlington is about 5 cents higher per gallon than the price in Albany,” A 9000 gallon tanker truck costs money to run. And Albany, NY is a major shipping point. So shipping fuel to Burlington should cost more than it costs in Albany. However, that doesn’t explain the $ .15 higher cost of gallon of fuel between Burlington and other parts of… Read more »
4 years 1 month ago
BERNIE’s VILLAIN DU JOUR ! (published on-line July 12. 2012) by Brooke Paige Does anyone check into these things before they start tapping out their opinions on the key pad then publishing it on their “blog”, sending it to press or airing it live! Certainly, the minions in the Sander’s camp – who put words in “Bernie’s” mouth DO NOT! A thirty minute examination of the issue (on the internet) and a few phone calls would have revealed ALL of the following! 1 – That the finished gasoline that is delivered from Rutland follows an entirely different production and delivery… Read more »
Jason Farrell
4 years 1 month ago

I was reading a political story yesterday which gave me reason to look up the the etymology of the term “blowhard”. And today, I’ve read a comment that clearly demonstrates a perfect example. Thanks Vermont Digger!

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