First, the news:
Washington Township, N.J., gas station ordered temporarily closed for price gouging
A judge on Monday [July 13] ordered the temporary closing of a Washington Township, N.J., gas station after the owners pleaded guilty to price gouging.
Express Fuel on Route 31 North, south of Washington, will reopen on Monday. The judge also ordered the station’s owners to pay a $1,500 fine and court costs.
An investigation by the Warren County Department of Weights & Measures revealed the station owners violated a rule permitting only one price change within a 24-hour period.
On June 19, the price for regular gas changed three times within a few hours. At 11:03 a.m. that day, the price was $2.43.9 a gallon. The price went down to $2.39.9 at 11:24 a.m. and up to $2.41.9 at 2:10 p.m.
Weights and Measures Superintendent Michael Santos said typically the price changes are all upward or all downward. He said the changes reflect competition among gas stations.
Santos speculated the Express Fuel price went down and back up that day because the owners realized they mistakenly lowered the price more than they needed to.
The gas station is closed all week.
This stupidity momentarily rendered me speechless.
During that moment, I looked up some associated data. All of the prices mentioned in the article were about 10 to 15 cents below the average price in the state at the time (about $2.56/gallon mid-June according to AAA’s Fuel Gauge Report). So this is not “price gouging” in the normal English-language meaning of the term, not even close.
Nonetheless, more than one price change in a day is apparently a violation of somebody’s rule. Pending revision of the rule to something more sensible, there was a technical violation of the rule. Fine. Stupid rule, as this case illustrates, but a violation is a violation.
But why impose a penalty on the station that also penalizes gasoline customers in the area by giving them one fewer station to shop at for a week?
Clearly the court-ordered shutdown of the station for a week will harm consumers many times more than the harm, if any, from the station changing its price twice in a day.