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Nov 25, 2008 12:54 PMPublication: The Southampton Press

Gasoline prices are still inflated here, despite new law

Nov 25, 2008 12:54 PM

Three weeks after a new state law prohibiting zone pricing of gasoline went into effect, gas stations on the South Fork are still charging more than anywhere else on the East End.

Though the price for gasoline has dropped precipitously in recent weeks, drivers who regularly leave the Hamptons are still finding that gasoline costs more than 25 cents more per gallon here than it does just 10 miles west in Riverhead, despite a law that went into effect on November 24 that was designed to outlaw charging more for gasoline in supposedly wealthy areas.

According to anecdotal reports, the least expensive gas on the East End was an amazing $1.75 per gallon reported on December 7 at the Valero station on Route 25 in Jamesport. On December 9, the Citgo station on Route 24 in Riverside was advertising regular gasoline for $1.89 per gallon, while, 10 miles away, the Hess station on County Road 39 in Southampton was charging $2.32 and the Sunoco station just east of there was charging $2.35 for regular gasoline.

The Consumer Protection and Fair and Equitable Motor Fuel Pricing Act was designed to keep oil wholesalers from charging more based on the demographics of an area, and carries a penalty of $10,000 per violation per day.

So why have the prices not gone down if the cost of violations is so steep?

The answer is pretty simple, according to Kathryn Odessa, the executive director of the Long Island Gasoline Retailers Association. Refiners and their affiliates are exempt from the law, she said.

New York State Assemblyman Fred Thiele, who pushed to have the new law passed, said that while gas stations that are owned by oil companies would be exempt, most brand-name gas stations here are franchises that are independently operated.

“In company-owned stations there’s no sale from the wholesaler to the retailer,” said Mr. Thiele, who added that “there are very few company-owned stations” on the East End.

Ms. Odessa said that, while retailers are in favor of the law, “all of the hard work will not change much for any of us.”

Ms. Odessa said that she assumed lawmakers knew when they drafted the law that refiners and their affiliates would be exempt.

“This has floated around for 20 years. It never passed,” she said. “We’ve always had a hard time getting this through. That loophole may have been part of the issue.”

Ms. Odessa said that stations that sell “only independent unbranded” gasoline bought from a distributor as is, not from a refinery, would have to charge less for gasoline under the new bill.

For example, the price at the Superior gas station in Aquebogue, one of the few independent gas stations in the area, which had historically carried higher-priced gas than neighboring stations, is more in line with prices in the area. This past weekend it was selling regular gasoline for $1.99 per gallon.

Ms. Odessa said that Empire, Valero and other small companies that buy from distributors, not refiners, may have to abide by the law, though she said that they are not the companies that tend to engage in zone pricing anyway.

“Most of the retailers in business will continue to fall victim to zone pricing,” she said in a letter to The Southampton Press this week. “This is apparently why, after all of these years, this bill finally passed into law without oil company resistance.”

Mr. Thiele said, however, that The New York State Petroleum Council had “lobbied vigorously against this legislation,” despite the council’s associate director Cathy Kenny’s recent letter to The Press in which she stated that the oil industry did not have undue influence over the state legislature.

Ms. Kenny said that the major oil companies contributed less than $6,000 to the entire state legislature, including campaign committees, in 2007.

Ms. Kenny stated that the law does not apply to refiners or their affiliates, and made reference to several studies that indicated that attempts to ban zone pricing would have an adverse effect on consumers because prices would need to be raised in other areas to make up for lost revenues in the areas where zone pricing is currently in effect.

“It’s obvious that they’re challenging the state to enforce the law,” said Mr. Thiele. He added that he and another assemblyman, Adam Bradley of Westchester, who introduced the current law, wrote to the New York State Attorney General asking that the law be enforced as soon as it went into effect, because they anticipated that the oil industry would challenge it.

“They have it under advisement. They have to build a case if they’re going to enforce it,” said Mr. Thiele of the Attorney General’s office. “They have the right to get restitution, an injunction, and enforce a civil penalty. The law’s got a lot of teeth.”

The Attorney General’s office did not respond to requests for comment.

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They are still overcharging us east of canal folks. On purpose as we drive to Riverhead to shop, we take the "empty car" and fuel it up on Route 24. I paid $1.85 yesterday a paltry $45 fill up when it used to be over $100. If I ever get caught short Ill only put in a few bucks until I get to Flanders, just out of prinicpal.
By North Sea Citizen (501), North Sea on Dec 10, 08 10:44 AM
Ms. Kenny has been giving this rhetoric from the petroleum council for years. We always have paid a Hamptons " tax " on gasoline. Our prices on the east end are already the highest in Nassau or Suffolk county. Ms. Kenny is going to scare us that we are going to pay even more. Nice try but very transparent. Most stations will say they need the higher price on gasoline because on the lack of volume out here. You build volume by lowering price not raising it! What the attorney-general needs to dig ...more
By Mets fan (1193), Southampton on Dec 10, 08 1:56 PM
hey the big oil companys will just pay the fine for breaking the law with the extra money they recieve from there out east stations.weak
By pinga (90), hamptonbays on Dec 10, 08 3:40 PM
Let's get this straight we get study after study looking into zone pricing...maybe 5 - 7 years worth. And now we are told oh by the way our local politicians came up a little short!!! Give us a break. how could they not have known about this before drafting legislation. I f every business operated like this a hot dog would cost $17.50 in montauk!
By eastender09 (22), southampton on Dec 10, 08 4:28 PM
Don't worry Rep Tim Bishop is looking into it. At least that is what he promised when he first ran. No problem just like North Sea Citizen I too have always done my food shopping in Riverhead and went on an empty tank. Between the gas and not shopping at King Kullen I have saved enough money each year to pay for a trip to LV and a cruise every year for my wife and myself.

In the infamous law suit against Hampton Bays by the developers of the McDonalds and Stop n Shop it was proven in ...more
By Dr Spock (36), Hampton Bays on Dec 10, 08 5:16 PM
Everyone in Southampton and Southampton village should be calling the Attorney General's office to get him to get after these crooks and fine them the $10,000 fine. The number is 1 518-474-7330. The secretary gets annoyed and wants you to call this number (which you can call too)1-800-996-4630. Make sure the Attorney General's office knows how disgusted you are that the law is not being enforced. It became law on Nov. 24th. How long do we have to put up with this???
By bayview (155), Southampton on Dec 10, 08 5:22 PM
If we all collude and get our gas in Riverhead and further up the island, then the stations around here will lower their prices. That's probably a temporary fix so what we need to do is call Tim Bishop's office and give him our thoughts on this issue and ask him to do something about it. That's why we re-elected him, so he can work for us!
By landarchi (33), Southampton on Dec 11, 08 9:24 AM
If everyone "colludes" and boycotts local gasoline stations in favor of those in Riverhead and "further up the island," then the stations around here will soon be shuttered.

Didn't think about that too much, did you, Landarchi?

I'm fortunate that I can easily fill up close to home. I feel sorry for everyone who lives and works East of the Canal.

O, and Tim Bishop won't be of any help on this!
By Frank Wheeler (1798), Northampton on Dec 11, 08 12:44 PM
The politicians are useless. Thiele won't even return phone calls on this matter. Thiele i's a coward. These offending stations can charge what they want ; but we have the right NOT to buy gas at their stations. I am suggesting we organize a BOYCOTT of the 3 HESS stations. Reduce the demand and we'll lower the prices. Other stations will have to follow suit. We the consumers need to affect the change, The politicians won't.
By stephen (8), east hampton on Dec 11, 08 2:22 PM
Does anyone want to join me in organizing a BOYCOTT?
By stephen (8), east hampton on Dec 11, 08 2:24 PM
Today, Dec 11, Getty in Sag Harbor is charging $2.49 for reg. Stations on the north fork, the same distance from Riverhead are charging $1.75 for reg. So, it's costing me $15.00 extra to fill my truck. All crooks out here. But it's no different in other areas. That $8.00 beer you buy at Shea, cost them exactly 25 cents. That $1.29 coke at McDonald's costs them 1/2 cent. I won't buy gas in Sag Harbor, only at Hess. If I am in Riverhead, I will always fill up. Yes, I too think a boycott is a great ...more
By BruceB (140), Sag Harbor on Dec 11, 08 8:21 PM
Assemblymen Thiele had a letter in the Southampton Press.H e gave Attorney General Coumo's address but not his phone number or e-mail address. Everyone should call him!! Bug the heck out of him until he does something. He was out here speaking this summer and was gung ho about fixing the gas prices in our area.. Andrew Coumo's phone number again is 1-518-474-7330. As far as Tim Bishop, he is a Congressman for the Federal Government. We need our New York State legislators to fix this problem.. The ...more
By bayview (155), Southampton on Dec 12, 08 8:40 AM
Thiele won't return phone calls. I've tried reaching him via phone several times. We need to vote him out next election. He thinks he's too important to speak with constituents.. If anyone wants to help organize a BOYCOTT, starting with the 3 Hess Stations out here please e mail me at..ehbchbum@optonline.net. The politicians are useless. In my opinion we need to reduce the demand by boycotting to get our point across that we won't accept this gasoline rip off. Who wants to join in?? FYI The zone ...more
By stephen (8), east hampton on Dec 12, 08 9:54 AM
Another blunder by Thiele hurt the independents and protect the big oil companies such as Mobil/Exxon All that hype that he was going to do something to benefit his constituents but once again he failed playing once again to the rich. I recently traveled to Key West Fl 170 miles away from Miami a dead end and the price of a gallon of gas was the same as in Miami. I think what Thiele needs to learn is that action speaks louder than words. All overcharging stations on the east end should be boycotted. ...more
By harbor man (38), sag harbor on Dec 13, 08 8:07 PM
Harbor man are you willing to help organize a boycott? Let's stop talking and start doing something, Thiele is useless. We need to do it ourselves. If you are willing please contact me...e mail address....ehbchbum@optonline.net
By stephen (8), east hampton on Dec 14, 08 11:40 AM
I would first like to see Thiele defend his law and put it into practice in other words enforce it and then see what happens To boycott the Hess stations does not make sense when they are the cheapest on the east end. It's sad many of us have to travel to Riverhead to grocery shop and save on gas but the trip is worth it. Let's face it everyone charges more in the Hamptons gas groceries and all services painting yard keeping painting pool cleaning etc which adds an additional burden for all of ...more
By harbor man (38), sag harbor on Dec 16, 08 11:40 PM
Harbor man, in my opinion, boycotting Hess , which by the way is only a few pennies cheaper, would be the mose effective way of reducing gas prices out here. They would be forced to lower their prices. Think of all the publicity we would get about the pricing inequities out here. Perhaps following on that success we could do the same with either Waldbaums in East Hampton or King Kullen in Bridgehampton. Any one interested in helping to organize this?
By stephen (8), east hampton on Dec 17, 08 9:58 AM
The State of Florida has passed a law requiring that the price of gasoline not be more than ten cents higher than the lowest price throughout the state. That law was enacted because of the price gouging of gasoline in the Keys. This sounds very familiar to what has been and is happening on the South Fork.
By SHNative (554), Southampton on Dec 17, 08 12:17 PM
Maybe our caring, illustrious politicos can enact the same legislation. I'm not counting on it. Therefore I'm suggesting we organize a boycott. Interested in helping to organizie it?
By stephen (8), east hampton on Dec 17, 08 3:04 PM
number one a boycott isn't going to help you if you live in east hampton. Secondly, theile was on the radio the other day stating that the law as written DOES NOT apply to 95% of all gas stations on the sofo!!! That's my point....they have been looking into to this for at least 5 years and maybe longer!!!!!! You can see how gov't works here. They studied the problem and then drafted legislation that DOES NOT solve the problem.
By eastender09 (22), southampton on Dec 17, 08 4:35 PM
Eastender would you care to explain why you think a boycott won't be effective if one lives in east hampton. I am convinced it would lower gas prices by decreasing the demand. Hess would have to react by lowering prices. You are right about the politicians not being effective. As far as i'm concerned Fred Thiele is useless
By stephen (8), east hampton on Dec 18, 08 7:41 PM
Although I appreciate everyone's dismay over the higher gas prices on the East End, there are a few key points you might be missing:
a. The law was written to control the WHOLESALE price of motor fuels, not the RETAIL price. The problem arises because although a wholesaler can't charge more for a station in a more affluent area as compared to another, this doesn't apply across town to the other retailer who buys from a different wholesaler who may or may not charge a whole different rate set.

b. ...more
By EHamptonGasGuy (4), East Hampton on Dec 19, 08 8:14 PM
You are so full of it!! I hated reading your BS blog. I am Bayview and I don't own a mini van. I own a Mercedes. I don't ask for help at gas stations!! I DO NOT get gas any where but Riverhead. I don't care if you are polite or speak Swahilli. All I want is a fair legal gas price. The gas station on North Sea Road just after country Rd. 39 is the worst price gouger in all of the Hamptons. He is the Ocean Gas Station and everyone should boycott him! EHGG there are places reserved for you in HELL!!!
By bayview (155), Southampton on Dec 21, 08 4:31 PM
I hope you and your family find some happiness this holiday season, Bayview. Smile once in a while, you'll feel better.
By EHamptonGasGuy (4), East Hampton on Dec 23, 08 10:36 AM
Smile. I was laughing so hard over your BS blog,I could hardly contain myself!! I think everyone would be a lot happier if people like you stopped raping the public without trying to defend it. It is as it is !!! MERRY CHRISTMAS!!!
By bayview (155), Southampton on Dec 23, 08 5:17 PM
I can only tell it like it is, I have no reason to lie or exaggerate. You have not read my comments carefully nor the original story or you would realize that the $10K fine would be impossible to hand out to an individual gas station, since the law was written and the fines can only be imposed on WHOLESALERS.

And, yes, when the fellows are speaking "Swahilli" to each other in front of you they are talking about you.

It's amazing that you would think I have a place reserved in ...more
By EHamptonGasGuy (4), East Hampton on Dec 23, 08 7:59 PM
Bayview and eh gas guy you've got it all wrong. Gas guy charge whatever you want. I like bayview own and drive a mercedes(2008 s 550). However we needn't buy gas from you. I for one try not to buy gas in the "hamptons". I refuse to pay inflated prices. If more people did that we would succeed in lowering prices. God bless capitalism and supply and demand and free markets. Let's organize a boycott of offending retailers and see how rapidly we can lower prices. Where is that fearless leader Fred Thiele ...more
By stephen (8), east hampton on Jan 5, 09 5:15 PM
Stephen, thanks for your comment, but I don't have it all wrong. I can only speak from my experience and don't sugar coat the facts.

I'd love to know what kind of business you and Bayview are in to be able to afford Mercedes, I imagine your businesses don't give away your services or products and provide you with health insurance and time off.

By EHamptonGasGuy (4), East Hampton on Jan 9, 09 1:05 PM