Idaho convenience stores deny gas price-gouging allegations but agree to lower prices
Idaho’s three largest convenience store chains have agreed to provide $1.5 million in discounted gasoline to settle claims they gouged customers during the coronavirus pandemic.
Maverik, Jacksons Food Stores and Stinker Stores did not admit to any wrongdoing. However, the three companies agreed to lower their gas prices next year to address concerns rasied by an investigation by the Idaho Attorney General’s Office.
“Even as we disagree with the premise of the Office of Attorney General’s inquiry, we cannot ignore the community benefit our agreement will create,” Maverik, Jacksons and Stinker Stores said in a joint statement. “It provides us with another opportunity to offer consumers a break at Idaho fuel pumps just when they need one.”
Maverik and Jacksons agreed to provide $600,000 each in discounts, while Stinker will provide $300,000. The stores will receive credit for gas prices that dip below the existing average margin for gas sold in the six states bordering Idaho.
For example, If the average margin in those states for a given month is 25 cents per gallon and one of the retailers sells a customer 10 gallons of gas at a price with a margin of 15 cents per gallon, the store would earn a credit of $1.
The companies have a year to complete their obligations.
“I am pleased that we were able to address my office’s concerns and reach agreement on this matter, and in doing so, provide Idaho consumers with meaningful redress,” Idaho Attorney General Lawrence Wasden said in a news release. “I want to commend the retailers for their willingness to be part of this solution.”
Gov. Brad Little’s March 13 emergency declaration triggered Idaho’s price gouging law, which prohibits selling fuel, food, drugs or water at an exorbitant or excessive price during a declared state of emergency. It was the first time the law has been used since it was implemented in the aftermath of the Sept. 11, 2001, terrorist attacks on the East Coast.
Within three weeks of the order, the convenience stores were selling gas at three to four times the historical margin between wholesale and retail gas prices, Deputy Attorney General Brett DeLange, head of the state’s consumer protection office, told the Idaho Statesman by phone.
“What we saw was the wholesale price plummet after the emergency declaration,” DeLange said. “Retail prices trended a little bit down, but not at the same rate.”
The average price of unleaded gas on March 9 in Boise was $2.62 per gallon, according to Gas Buddy, a gas-monitoring app. The price fell weekly between then and May 11, when it reached $1.73 per gallon. By the 4th of July, it rose to $2.35. On Monday, Nov. 30, the average price was $2.20, down 2.2 cents from the week before.
The Attorney General’s Office regularly monitors wholesale and retail gas prices through a subscription with the Oil Price Information Service, which analyzes the industry. Statistics gathered from OPIS provides historical data on the margins between wholesale and retail prices in Idaho.
“We saw margins that were in excess of historical averages, and that led the attorney general to have concerns that they were selling at an exorbitant or an excessive price,” DeLange said.
Within weeks of Little’s emergency declaration, the Attorney General’s Office contacted the Idaho Petroleum Marketers & Convenience Store Association expressing concerns about gas prices set by the three convenience store chains. On April 7, the office asked the stores to provide data on their wholesale and retail prices, along with expenses.
This story was originally published November 30, 2020 at 1:37 PM.
