NY Enacts Gas-Price Gouging Law

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NY Enacts Gas-Price Gouging Law

NEW YORK -- Lawmakers overrode a mayoral veto and passed a bill this week that seeks to crack down on gasoline-price gouging, the Staten Island Advance reported.

The new law prevents gas-station owners from raising prices more than once in a 24-hour period, and requires them to keep detailed records on their wholesale deliveries and retail sales for a year. Violators are subject to fines ranging from $500 to $10,000.

"This is a very common-sense, and fair, consumer-protection piece of legislation," said speaker Christine Quinn. The bill was first introduced the Friday before Labor Day weekend last year, as gas prices were nearing $4 a gallon after Hurricane Katrina.

The bill passed the Council in July. Wednesday's Council vote of 43 to 6 mirrored the July vote. Its lead sponsor, Councilman John Liu (D-Queens), said the measure targets the tiny percentage of proprietors who raise their prices in the absence of wholesale-price increases. The practice is most often seen at times of peak demand, such as long summer weekends, Liu said.

"They're clearly taking advantage of a disruption or shortage in the supply," he said. Although prices are dropping, Liu called the law a "protection measure" for the next time a market change sends prices soaring.

But James Calvin, president of the New York Association of Convenience Stores, argued the bill was unnecessary because retailers virtually never raise their prices more than once a day. The exception came last summer, when wholesalers raised prices three times in one day. Without the flexibility to react, retailers wouldn't have had enough money to replenish their supply, Calvin said.

He added that New York state already prohibits gas-station owners from raising prices above a certain level in times of emergencies, and that Attorney General Eliot Spitzer prosecuted a slew of them last year.

This bill marks the first time that Mayor Michael Bloomberg has been overridden since speaker Quinn took office in January, the Staten Island Advance said.

Bloomberg's veto reflects his hands-off philosophy when it comes to private enterprise. "The city, I do not believe, should be engaged in telling businesses how to run or price their product," he said in July. It remains to be seen whether he will direct the Department of Consumer Affairs to enforce the law, the report said.