As most consumers have noticed, gas prices are on the rise. Many factors contribute to the increases we see at the pump, including major world events. We know that high gas prices continue to impact families and businesses, but that rising gas prices alone, however, are not necessarily an indication that gas station retailers are engaging in unlawful conduct.
The Attorney General’s Office is committed to providing consumers helpful information, and to fighting higher gasoline prices if those price increases violate the law.
Here’s some basic, helpful information to help you deal with rising prices:
Unlawful practices: It is unlawful for companies to collude to raise prices or to take advantage of market emergencies, such as hurricanes or other severe storms, to charge unconscionably high prices. If you have concerns or evidence of collusion or price gouging, please contact us at 617-727-8400, or file a complaint online.
Credit v. Cash at the Pump: Consumers should be aware that stations can charge different prices for using cash to pay versus using a credit/debit card. Massachusetts law, MGL c. 140D § 28A, allows gas stations to discount their price for consumers paying with cash. The gas station should be advertising the higher price. If a discount is offered for cash sales, the word “cash” must be included in the applicable portion of the sign. You can read more about guidelines for signage of the cash sale option. If you have concerns or evidence of discrepancies in prices, please contact us at 617-727-8400, or file a complaint online.
Educate Yourself: You can research gas prices before filling up your tank. Various websites and smartphone apps are available to help you identify rates at service stations near you. Some of the information is provided by other users who are on the lookout for their fellow commuters. While we’re not responsible for the content of any of the links below, you may find them useful:
FAQs about Gas Prices
As prices at the gas pump continue to rise, the Attorney General’s Office is committed to providing consumers helpful information. AG Coakley has issued an advisory to consumers on gas prices, and offers the below answers to frequently asked questions.
The Office of the Attorney General intends to monitor compliance with the regulations governing the retail advertising and sale of gasoline and will enforce these regulations against any noncompliant retailers. AG Coakley asks drivers with allegations of unlawful behavior regarding gas prices to contact her office’s consumer hotline at (617) 727-8400.
How can I shop around for the lowest gas price in my area, without driving around and wasting gas?
Various websites and smartphone applications are available to help you identify rates at service stations near you. See above for a sample of some of the options available.
Is it legal for oil companies and gas stations to keep increasing their prices?
The United States has long embraced a free market economy. Free market principles, such as supply and demand, establish the price for most goods and services, including gasoline. The government—state or federal—does not set the price for gasoline. A large number of factors determine how gas producers, refiners, wholesalers and retailers set their prices. Those prices are then subject, in a free market economy, to competition from other businesses.
Rising gas prices alone are not evidence of illegal or improper conduct by gas retailers. It is, however, unlawful for companies to collude to raise prices, such as an explicit agreement among competitors to raise or fix prices. In addition, in cases where a market emergency exists, such as in the event of a natural disaster or world conflict, it is illegal for a company to take advantage of that emergency by charging unconscionably high prices—which constitutes “price gouging.”
What factors influence gasoline prices?
Factors range from the costs of exploring for oil and extracting it from the earth, to the costs of refining oil into gasoline, shipping oil or gasoline from around the world to major distribution hubs, transporting gasoline from refineries to local retailers, to making it available at your local gas station or convenience store. Supply and demand factors influence prices at every level of production and distribution, including events across the globe that may affect supply. In 2007, Attorney General Martha Coakley and several other Northeast States commissioned a report on the structure of petroleum markets in the Northeast, including factors that influence how gasoline prices are set. For detailed information you can review the Report on Petroleum Products Markets in the Northeast. This Report was prepared in 2007 for Attorney General Coakley as well as the Attorneys General of Maine, New Hampshire, New York and Vermont.
Is there a law which requires gas stations to accurately display their prices for gas?
Yes. Pursuant to G.L. c. 94, section 295E, no retail dealer may sell motor fuel at any price other than the price posted at the pump at the time of the sale.
A local station charges a lower price for cash only purchases. Is this legal?
Massachusetts law (G.L. c. 140D § 28A) allows gas stations to discount their prices for consumers paying with cash. However, the gas station should be advertising the higher credit price clearly and conspicuously in its signage. If a discount is offered for cash sales, the words “cash” should be included in the applicable portion of the signs. When “cash” sales and other types of sales are made from the same dispenser, both prices must be posted and clearly labeled with the type of sale the price refers. i.e. “cash”, “credit”, “credit/debit”. You can read more about guidelines for signage of the cash sale option at http://www.mass.gov/Eoca/docs/dos/202CMR2%2000final_clean.pdf.
What types of conduct would violate the antitrust laws?
Price-fixing and other forms of collusion violate the antitrust laws. Price-fixing includes an explicit agreement among competitors to raise, fix, or otherwise maintain the price at which their goods or services, including gasoline, are sold to the detriment of either the competitive marketplace or consumers. Consumers can help by alerting the Massachusetts Attorney General’s Office if they know of any efforts by competing firms to fix or manipulate prices. Business mergers and monopolistic practices that would result in reduced competition and harm to consumers may also violate the antitrust laws. The Attorney General’s Office closely monitors proposed mergers to maintain competition.
If a “market emergency” existed due to a natural disaster or world conflict, what conduct would constitute “price gouging?”
A price may be deemed unconscionably high, and “price gouging,” if the amount charged represented a gross disparity between the price of the petroleum product and 1) the price at which the same product was sold or offered for sale by the petroleum-related business in the usual course of business immediately prior to the onset of the market emergency, or 2) the price at which the same or similar petroleum product is readily obtainable by other buyers in the trade area; provided that the disparity is not substantially attributable to increased prices charged by the petroleum-related business suppliers or increased costs due to an abnormal market disruption.