CPD Settles With N.Y. AG for $50,000

Largest penalty paid by single operator for gouging after Hurricane Sandy

Published in CSP Daily News

Eric Schneiderman

NEW PALTZ, N.Y. -- Major fuel wholesaler and retailer CPD Energy Corp., New Paltz, N.Y., has agreed to pay $50,000 in penalties for charging "unconscionably excessive" prices at six stations that it owns in Westchester, Putnam and Ulster counties. It reached the settlement as part of New York Attorney General Eric T. Schneiderman's ongoing investigation of high gasoline prices in the wake of Hurricane Sandy.

The CPD settlement represents the largest penalty paid by a single operator for price gouging on gasoline after Hurricane Sandy.

CPD supplies and operates stations in the lower and mid-Hudson Valley.

Schneiderman also obtained a default judgment of $23,733 against another operator, Mena Inter Inc., doing business as a USA Petroleum gas station in Farmingdale. The judgment includes disgorgement of excess profits, civil penalties and costs to the state, and it represents the largest penalty assessed for gouging at a single station.

The AG also reached monetary settlements with five additional station owners--two in Westchester, one in Rockland and two in Nassau--for violations of the New York State Price Gouging statute.

These actions follow 30 previous settlements announced earlier this year, and bring the total penalties and costs paid to $287,618 by 42 gas stations found to have engaged in price gouging. Schneiderman sued two other gas stations in May. Those lawsuits are pending. Investigations of several other stations are ongoing.

In the days after the storm, areas of New York saw some of the largest jumps in gasoline prices in state history, according to the AG's Office. The price jumps resulted in hundreds of complaints received by Schneiderman's office and showed that stations changed prices at the pump not only overnight, but several times a day.

New York State's Price Gouging Law prohibits merchants from taking unfair advantage of consumers by selling goods or services for an "unconscionably excessive price" during natural disasters. The price gouging law covers New York State vendors, retailers and suppliers. The law specifically says that a price may be considered excessive if there is a "gross disparity" between the prices charged immediately before and after the emergency and the disparity is not attributable to higher costs imposed upon the seller.

The following stations are covered by the CPD settlement:

  • Chestnut Mart (Mobil), White Plains.
  • Hutchinson Parkway Station (Mobil), White Plains.
  • Yorktown Food Mart Inc. (Mobil), Yorktown Heights.
  • Chestnut Mart Inc. (Mobil), Yonkers.
  • Friendly Service New Paltz (Mobil), New Paltz.
  • Chestnut Mart Inc. (Mobil), Patterson.

The price increases charged by CPD following Sandy at these six stations greatly exceeded CPD's additional costs. Because Hurricane Sandy knocked power out to the area's refineries, the regular supply terminal from which CPD purchased gasoline had either a limited supply available or none at all during the State of Emergency period. As a result, CPD bought gasoline from more distant terminals including Syracuse (Van Buren), Springfield, Mass., Revere, Mass., East Providence, R.I,, and New Haven, Conn.,, and incurred additional costs of approximately 16 cents per gallon to transport this gasoline to its stations; however, CPD's price increases at the six stations--which ranged from 42 cents per gallon to as much as 70 cents per gallon--greatly exceeded the additional transportation costs.

The default judgment was entered against the following station:

  • Mena Inter Inc. (USA Petroleum), Farmingdale.

Settlements were also reached with the following stations:

  • Katonah Gas & Auto Service Inc. (Mobil), Katonah.
  • Mamaroneck Service Inc. (Mobil), White Plains.
  • A&Z Service Center (CITGO), New City.
  • ZAM Service Center (BP), Huntington.
  • The 900 Broadway LLC. (BP), Massapequa.

Click here to view the stations' prices before the storm, maximum price after the storm, increase in price and other data.

Keywords: 
fuel prices