Schumer, Higgins Meet with FTC Chairman to Address Unreasonable Western NY Gas Price Disparity; FTC Chair Pledges a Study with Public Results

Press Release

SCHUMER, HIGGINS MEET WITH FTC CHAIRMAN TO ADDRESS UNREASONABLE WESTERN NY GAS PRICE DISPARITY; FTC CHAIR PLEDGES A STUDY WITH PUBLIC RESULTS

As Gas Prices Dropped Across Upstate New York, WNY Prices Remained High and Slammed Local Residents At the Pump

Original Investigation Stalled Under Old FTC Chairman; Schumer And Higgins Push To Build Momentum

Chairman Pledges To Work To Make Findings Public

U.S. Senator Charles E. Schumer and Congressman Brian Higgins today met with FTC Chairman Leibowitz to urge him to move forward on the investigation of the gas price disparity in Western New York. Schumer and Higgins laid out the severity of the problem to the new FTC commissioner and illustrated the effect it had on cash strapped families. They asked him to conclude the study as rapidly as possible and ensure that FTC not only made the study public, but provided detailed solutions that could be implemented quickly.

Chairman Leibowitz acknowledged the unreasonably high gas prices in Western New York and said his agency would look into possible zone pricing schemes and/or collusion, and will examine why gas prices didn't fall as fast as they did across New York State. He pledged to conclude the inquiry as soon as possible and to work to find a way to make the findings public.

As gas prices fell across the country late last year, Western New York's gas prices remained inexplicably high. But a Higgins-prompted investigation by the former FTC under the Bush administration produced no reasons or solutions for the problem and was not made open to the public. In a personal meeting with the new FTC commissioner, Schumer and Higgins demanded a quick, public and more comprehensive investigation.

"The stonewalling we received from the previous administration was unacceptable," Said Schumer. "The bottom line is that Western New Yorkers were paying too much for gas for too long and we must know why. After this meeting I am confident the FTC will take this issue more seriously and will do what is necessary to prevent Western New York from being again slammed with unnecessarily high gas prices. The meeting was positive and productive, and I will continue working with the Chairman Leibowitz and Congressman Higgins to ensure that this moves as quickly as possible."

"Last fall Western New Yorkers were paying unjustifiably high gas prices and despite repeated requests local consumers were left with no explanation," said Congressman Higgins, who requested an FTC investigation last October. "The Jamestown and Buffalo regions were among the top five most profitable for gas retailers in the nation which FTC officials confirmed were ‘out of bounds.' Under the new leadership of FTC Chairman Jon Leibowitz, appointed just days ago, and with the strong support of Senator Chuck Schumer, I am more confident than ever that local residents will receive the answers they deserve so we can prevent potential future disparities."

In late October of 2008, gas prices across the country and across New York State began to dramatically drop but Western New York's gas prices remained high. On October 21, 2008, the average retail price of gasoline in the Buffalo area -- $3.40 per gallon -- was $.08 more than the nearby community of Rochester, and $.36 and $.38 more than the upstate communities of Syracuse and Albany, respectively. At that time, Rochester had experienced a nearly 14 percent drop in gas prices, and Albany's gas prices had dropped 19 percent - but Buffalo's had only dropped 12.7 percent.

The gas price disparity persisted through the end of December. The average retail price of gasoline in the Buffalo area on December 21, 2008 was $2.04 gallon. That was $.06 more than Rochester, and $.13 and $.09 more than the upstate communities of Syracuse and Albany respectively. The national average price of gasoline at that time was $1.66.

While the price of gas in Buffalo is now more in line with the national and statewide average, it still remains high and the reason for the price disparity has not been identified. In October, Congressman Brian Higgins called for a FTC investigation into the causes of the gas price discrepancy between Western New York and the rest of New York State.

In an effort to prevent future gas disparities in Western New York, Schumer and Higgins today pressed the new chairman of the FTC for a quick, comprehensive, public study. Schumer and Higgins pressed for four actions:

* A Quicker Investigation

The study has been dragging on for too long while Western New Yorkers continued to suffer at the pump and still don't have the reasons or remedies for the disparity. Schumer and Higgins are pressing to ensure a quick, comprehensive study.

* A Public Report

The report should be made public and the findings should be in writing.

* A Detailed Report

The report should contain detailed findings, including data on the pricing anomalies, the reasons for the higher-than-expected gasoline prices in Western New York, the factors contributing to the unusually high prices, and who was responsible for the high prices.

* Possible Actions/Remedies

The report should propose possible actions and remedies to fix the price disparity problem.

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