N.J. Division of Consumer Affairs Charges Station With Gouging

Alleges 488 instances of excessive pricing following Hurricane Irene

Published in CSP Daily News

NEWARK, N.J. -- A Sussex County, N.J., gas station that raised its prices by more than 10% immediately following landfall by Hurricane Irene in August has been sued for allegedly price-gouging consumers.

The Division of Consumer Affairs has filed suit against Thakur Gas LLC, which does business as Lukoil in Branchville, N.J. According to the civil complaint, Ranbir Singh, of Roselle Park, serves as the company's initial member and registered agent.

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

"Taking advantage of those recovering from devastating disasters is despicable conduct," state attorney general Paula T. 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."

Governor Chris Christie on August 25 declared a state of emergency for all of New Jersey. State law deems price increases excessive if they are more than 10% higher than the price at which a good or service was sold in the usual course of business prior to the state of emergency. If additional costs are imposed by suppliers, prices are considered excessive if a seller's markup from cost increases by more than 10% compared to immediately prior to the state of emergency.

The suit alleges, for example, that the defendant charged an excessive price for regular-grade gasoline after the state of emergency had been declared because the cash price rose to $3.999 per gallon, from the $3.399 price per gallon charged immediately prior to the state of emergency. That change represents an increase of 17.65%.

The cash price for plus-grade gasoline increased from $3.599 per gallon to $4.199 per gallon, an increase of 16.67%. The cash price for premium-grade gasoline increased from $3.699 per gallon to $4.299 per gallon, an increase of 16.22%.

The lawsuit also alleges that the pump prices exceeded the allowable 10% markup even when factoring in the higher fuel costs the gas station paid its wholesaler.

The lawsuit, filed in State Superior Court in Sussex County, is the first case of alleged price gouging related to Hurricane Irene brought by the Division of Consumer Affairs. 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 separate and distinct event.