A.G. Schneiderman Announces Comprehensive Review Of Gas Prices In Western New York

Attorney General's Review Looks into Why Cost Per Gallon is $1 More in Western NY Since Same Time Last Year

In Addition, Schneiderman Asked to Represent Nation in U.S. Attorney General Working Group to Examine Gas Price Increases Nationally & Act on Consumer Violations


BUFFALO – Attorney General Eric T. Schneiderman today announced that his office is conducting  a comprehensive review on the rising cost of gasoline in Western New York. In addition, Schneiderman announced that he has been appointed to a national Oil and Gas Price Fraud Working Group instituted by U.S. Attorney General Eric Holder, joining a team to investigate any abuse of consumers in the pricing of oil and gasoline.

Prices at the pump have led to an increase in consumer complaints to the Attorney General’s office, and Schneiderman has directed his staff to compile data on the prices charged by gas retailers, as well as information on the chain of distribution, to determine the cause behind the continued increases. Schneiderman cautioned that there may not be wrongdoing behind the price spikes, but said that if there is, he will take all appropriate action.

“Drivers across Western New York have a right to know how gas prices are determined, and whether they are being taken for ride,” said Attorney General Schneiderman. “I have directed my office to review the area’s gas prices, and will take action against any violations that may exist. While we cannot guarantee there is wrongdoing behind the high prices, we can assure New Yorkers that we are thoroughly reviewing the matter.”

According to the American Automobile Association (AAA), the current national average price per gallon of regular gas is $3.98, compared to $2.89 at the same time just one year ago, representing a 38 percent increase.

That trend follows in the Buffalo-Niagara Falls area, where AAA is reporting the current average cost per gallon for regular gas is $4.07 – more than one dollar higher than last year’s average of $3.04. The current average for regular gas in New York State is $4.17.

The goal of the Attorney General’s study is to determine whether gas prices accurately reflect current market conditions or if there are unjustified price increases.  The review comes as the national and metro area per gallon rates remain high, even as the price per barrel of oil has fallen, and will monitor how local gas retailers respond to the decrease in world oil prices.

In an effort to understand the recent retail price increases of gasoline in the area, Schneiderman said his study will focus on how the current market volatility determines the cost of gas for retailers and subsequently whether that cost is appropriately passed onto consumers at the gas pump. During disruptions in the market for essential consumer goods such as gasoline, retailers and those within the chain of distribution are not allowed to take unfair advantage of consumers by charging grossly excessive prices unrelated to increased costs.

In addition to the comprehensive local review, Schneiderman's appointment to a federal working group will allow the Attorney General to have a voice at the federal level and contribute evidence gained in his own investigation. New York is the only state with a self-triggering price gouging statute that does not require the declaration of an emergency by the Governor and therefore permits the state Attorney General to investigate price gouging tied to national and international events - not just events within the borders of the state.

U.S. Attorney General Eric Holder formed the working group last month at the request of President Obama, who asked federal and state agencies to examine oil and gas markets for potential wrongdoing.  The working group is part of the President’s Financial Fraud Enforcement Task Force, established to investigate and prosecute financial crimes.

Attorney General Schneiderman will represent the National Association of Attorneys General on Oil and Gas Working Group. Other members include the representatives from the Department of Justice, the Commodity Futures Trade Commission, the Federal Trade Commission, the Department of the Treasury, the Federal Reserve Board, the Securities and Exchange Commission, and the Departments of Agriculture and Energy.

“At a time when the public is very skeptical about what goes on behind the scenes when determining gas prices, it is my responsibility to make sure that everyone involved in setting prices plays by the rules,” said Attorney General Schneiderman. "I'm pleased to be a part of President Obama's national working group and I am committed to any effort that will hold culpable parties responsible for any oil and gas price fraud."

The Attorney General's office is in the process of gathering pricing data from gas station retailers throughout the region and will release any relevant findings in the coming weeks.