Nov. 6 (Bloomberg) -- The New York attorney general’s office is looking into whether gasoline offered through the Craigslist website for as much as $8 a gallon is legal as motorists cope with retail shortages after Hurricane Sandy.
The price for fuel in New York City and Long Island by some individual sellers on Craigslist, the online-classified ad site, was almost double the latest average city price of $4.102 published today by AAA, the largest motoring organization. The New York State Agriculture and Markets Department’s Bureau of Weights and Measures is investigating gasoline advertised for sale on Craigslist, the agency said today in an e-mail.
Drivers in the New York area have been forced to stand in hours-long lines or go to other states to fuel up after Sandy shut East Coast refineries and harbors, curbing gasoline production and imports. The storm made landfall Oct. 29 near Atlantic City, New Jersey.
“A lot of times in the wake of a disaster, people are trying to find resources and the normal networks are blocked,” Mark Skidmore, an economics professor at Michigan State University in East Lansing, said by phone yesterday. “So people find creative ways to get it in, but it’s more expensive. They are providing a service in some sense.”
Melissa Grace, a New York City-based spokeswoman for Attorney General Eric T. Schneiderman’s office, said yesterday that the agency is looking into whether sales from Craigslist or informal networks are legal. New York is investigating complaints from consumers about price-gouging, Grace said.
Laws regarding the sale, quantity and quality of petroleum products fall under the New York State’s Bureau of Weights and Measures, Joe Morrissey, an Albany-based spokesman for the agency, said in an e-mail.
Craigslist didn’t immediately respond to an e-mail asking for comment.
A Craigslist advertisement offering $8 gasoline yesterday for delivery to Brooklyn or Staten Island was answered by a man who would only give his first name, Mike. The Coney Island, New York, man said he had sold between 50 and 60 gallons (189 to 227 liters) of the fuel after purchasing about 100 gallons in Connecticut.
A separate $8-a-gallon listing was answered by a man who said he bought two drums of gasoline that hold about 70 or 80 gallons from friends who purchased the fuel in upstate New York. He said he was delivering the fuel to customers near Woodmere, Long Island, at a cost to him of about $7.50 a gallon, including transport. He declined to be identified because he said he wasn’t sure if reselling the fuel was legal.
$20 a Gallon
A. Omar. Almodovar, a 35-year-old medical secretary in New York, paid $100 for five gallons of gasoline today to a person who advertised on Craigslist, he said in a telephone interview. The seller of the $20-a-gallon fuel was asking for $30 more for the gasoline container, which Almodovar didn’t purchase.
A Uniondale, Long Island, man who returned a telephone message today from a number listed on Craigslist yesterday said he is selling 2.5-gallon fuel containers, filled with gasoline, for $49.99. The man said he is a financial consultant and that he had has sold 15 of the containers mostly in Queens and New York City.
The man said he purchased the fuel in Connecticut and the containers in Pennsylvania.
New York’s Bureau of Weights and Measures “has also responded to a few complaints regarding people selling gas on the street,” Morrissey said.
The state Environmental Conservation Department regulates all retail fuel stations for gasoline emissions, Emily DeSantis, an Albany-based spokeswoman, said in an e-mail.
As long as sellers aren’t earning more than $600 in each quarter of the year from reselling the fuel, there “really is not a tax implication involved here,” Geoff Gloak, an Albany-based spokesman for New York Taxation and Finance Department, said in a telephone interview. “It’s the same as if you have a garage sale at your house.”
Seventy to 75 percent of retail fuel stations are open in New York City, Michael Green, a Washington-based spokesman for AAA, said in an e-mail today, up from 60 to 65 percent yesterday. The figure rose to 65 to 70 percent in New Jersey from 55 to 60 percent yesterday and increased to 60 to 65 percent from 50 percent to 55 percent on Long Island.
New York is investigating “hundreds of complaints” from across the state since Sandy, and most related to gas prices, Schneiderman said in a statement yesterday. The state’s price-gouging law prohibits merchants from taking advantage of consumers by selling goods or services for an “unconscionably excessive price” during “abnormal disruption of the market.”
New Jersey investigators are tracking fuel sales on Internet sites such as Craigslist, where some posters are offering “a couple of gallons for sale,” Jeff Lamm, a spokesman for the state division of consumer affairs in Newark, said by phone yesterday. Such sales would violate the state Motor Fuels Act, which requires that sellers be licensed to dispense fuel.
New Jersey Attorney General Jeffrey Chiesa has issued about 100 subpoenas to businesses accused of price gouging, he said in a statement yesterday.
Roughly 90 percent of reports post-Sandy involve gouging at filling stations, with some locations drawing as many as 25 consumer calls or e-mails to state investigators, who also have received reports about improper charges at hotels and motels, and on sellers of food, water, batteries and flashlights, according to Eric Kanefsky, the acting director of New Jersey’s division of Consumer Affairs in Newark.
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