Virginia settles price-gouging claim against Timberlake Citgo

Related:

Area gas stations hike prices; some pumps run dry - Sept. 12, 2008

 

Ironically, the first gas station in the Lynchburg area to be officially accused of price gouging is one that is usually known for its low price.

Timberlake Citgo employee Anjum Iqbal said they always try to be a few cents cheaper than other stations. On Tuesday the store near U.S. 460 sold gas for $2.33 per gallon. A nearby Shell station charged $2.35.

But last September, Timberlake Citgo charged $5.399 per gallon for about 12 hours while Hurricane Ike approached the Gulf Coast, prompting a run on local gas stations. On Tuesday, Virginia’s attorney general announced that his office had reached a price-gouging settlement with the store.

Across Virginia, thousands of consumers complained of price gouging at gas stations the weekend of Sept. 12. The Department of Agriculture and Consumer Services looked into the claims, giving potentially valid ones to the Attorney General’s office for investigation.This is the first settlement related to price-gouging allegations in the Lynchburg area. In June, a similar settlement was reached with a chain of stores in Radford.

Timberlake Citgo is setting aside $200 to give partial refunds to customers who topped off their tanks at the gouged price. Also, the store must pay $1,500 to the attorney general’s office and $500 to the Red Cross Disaster Relief Fund.

By settling, the store does not admit to wrongdoing. However, Mubashar Iqbal, the store’s manager, said that they did not want to fight the allegation, having just moved from Pakistan to Virginia.

“I was new (to) this country. I did not want to dispute,” Iqbal said. “… If you are new, you don’t know anybody here. What are you going to do?”

Virginia’s price-gouging law forbids “unconscionable” price increases on items like food and gas when the governor declares a state of emergency. Gov. Timothy M. Kaine declared an emergency while Hurricane Ike loomed in the Gulf of Mexico last year.

On Sept. 12, several oil refineries in Texas shut down to prepare for the storm. That prompted concerns about a gasoline shortage and sent hundreds of drivers in the Lynchburg area to fill up while they still could.

The drivers drained the pumps at many stations as prices rose above $4 per gallon in a matter of hours.

According to Timberlake Citgo’s settlement agreement, the station sold more than 3,000 gallons on Sept. 12 at about $3.69 per gallon.

At around 7:42 p.m., an employee raised the price to $5.399 per gallon, according to the settlement.

He raised the price to discourage customers from using credit cards to buy gas overnight, Iqbal said. The employee did not want to risk damage to the store’s equipment if the tank ran dry overnight, he said.

The store dropped the price below $4 per gallon the next morning without any action by the state, according to the settlement.

David Clementson, spokesman for Attorney General William Mims, said that 29 people bought a total of 128 gallons of gas while Timberlake Citgo charged $5.399 per gallon. However, the price-gouging law would have applied even if no one bought gas while the price was raised, he said.

Iqbal said he moved to the U.S. in September last year, and in November he began working at Timberlake Citgo, which is owned by his brother in Ohio. He soon received a letter from the Attorney General’s office about the alleged price gouging.

After looking at the data on the prices, he said he decided not to dispute the allegations. The settlement was not finalized until this week in part because his brother, the owner, was out of the country and could not sign the necessary documents for some time.