What is Gas Gouging?

Gas gouging or price gouging is a practice which involves raising prices on gasoline at the pump dramatically, sometimes in collusion with other gas stations. As a general rule, in order to be considered gas gouging, the jump in price must be sudden, and there must be no clear reason for raising the price that much. Although the high price is seen at the pump, leading people to believe that it is the responsibility of the station owner, gas gouging often starts with the company which delivers fuel: if the price of fuel rises abruptly, the gas station's owner must raise prices to compensate.

In some regions, gas gouging is treated as a crime, and government agencies may investigate accusations of gouging. The concern is that gas companies and individual stations may be raising their prices to take advantage of consumers, since consumers are usually forced to purchase at least some gas every week in order to get to work, do errands, and perform other tasks. When gas prices are raised to a level which appears unreasonable, it can hurt consumers.

There are some perfectly logical and entirely legal reasons for gas prices to jump suddenly overnight. For example, refinery fires and other issues may create a shortage, in which case higher prices may be charged for gas to encourage people to conserve, ensuring that there is enough gas for everyone. Environmental issues such as storms preventing delivery may cause an elevation in price, or station owners may be obliged to offer hazard pay to station staff who work through a storm or emergency situation. Gas prices also do not necessarily move with crude oil prices, since they are influenced by a variety of factors.

In a classic example of gas gouging, a station owner might raise prices during a natural disaster, knowing that people will be willing to pay those prices so that they can fuel up to evacuate. In these instances, people are also usually unwilling to complain about the high prices, because they are in a hurry to evacuate and they don't want to lose their place in the gas station's lines. If that gas station owner reaches an agreement with other station owners to raise their prices too, this is considered collusion, and it can be grounds for serious legal penalties.

Consumers who suspect that a gas station is engaging in gas gouging can often report it to a government agency. If enough complaints are received and the prices do seem to reflect a genuine case of gas gouging, the government agency will investigate and potentially fine the gas station's owner. If a case of collusion can be proved, other agencies may get involved, and the penalties can be quite severe. People who want to complain about suspected gas gouging should note the name and address of the station and the prices for fuel. If possible, taking a time-stamped picture of the station's pricing sign is advised, so that the consumer can prove his or her claim of gas gouging. Especially if prices fluctuate radically over the course of a day, taking multiple photos can back up a claim.