Unfortunately when Tragedies like Hurricane Katrina happen some people will try and profit at the expense of all others. Some Cases of Gasoline Price-gouging always seem to follow Natural Disasters like Hurricane Katrina. Here are some key questions about gas pricing and what you should do if you feel you were a victim of Price-gouging.
1 – How are Gas Prices Determined ?
Gas Prices are made up of 4 Components
- Crude Oil Prices
- Gas refining costs
- Taxes
- Retail Markup
Of the above 4 components of gas pricing the retail markup (the profit made by the gas station owner) is often the smallest. Crude Oil Prices (the Oil direct from the ground) and Refinery Costs (Turning the Raw oil into usable product like Gasoline and heating oil) are a large majority of the cost and profit. Even the State Taxes are often higher then the Retail Markup.
2 – Why do gas prices vary so much State to State ?
The biggest reason especially in the case of Neighboring states like New York and New Jersey or Illinois and Missouri is state taxes. Gulf Cost States (Mississippi, Alabama, Louisiana, Texas) have lower gas prices then the rest of the country because they are closet to the Gulf of Mexico where about 1/2 of the Gas is Produced.
3 – What Should You do if you suspect price-gouging?
Price-gouging is a very sensitive subject. Just because one gas station is charging 10%, 20% or even 30% more then others in the same area doesn’t mean it is price-gouging? Before you report price-gouging check with websites like Gasbuddies.com to determine the national average price and your local price. Clearly if you paid 2 or 3 times the local price you were gouged. If you pay 50% or more above the average price it may be harder to determine price-gouging. If you feel you were significantly over charged for gas then save your receipt and contact your State Attorney General.
The Department of Energy has a web site (gaswatch.energy.gov) where consumers can report suspected price-gouging
About the Author
Mike Makler Offers Financial Services (Mortgages,Life Insurance, Annuity) in Florissant Missouri which is in North St. Louis County Missouri Just Across the Bridge from St. Charles Missouri
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