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Schumer, Higgins Announce Plans to Press Next FTC Chairman to Speed Up Investigation of WNY's Inexplicable Gas Price Disparity, Require The Study Be Made Public, And Make Sure It Covers All Bases

Jan 26, 2009
Press Release

In the first full week of the new Obama Administration, U.S. Senator Charles E. Schumer and Congressman Brian Higgins today announced their plan to call on the next Chair of the Federal Trade Commission (FTC) – who is expected to be named by the new administration shortly – to speed up the current FTC investigation of the gas price disparities in Western New York late last year, require it be made public and make sure it covers all bases.

As gas prices fell across the country late last year, Western New York’s gas prices remained inexplicably high, and still remain too high. But a Higgins-prompted investigation by the former FTC under the Bush administration has yet to produce reasons or solutions for the problem and was not made open to the public. Schumer and Higgins said today that in addition to calling on the next FTC chair, who will work under the new Obama administration, for a quicker, public and more comprehensive investigation, they want to ensure the study contains detailed findings, including identifying who was responsible for the high prices and suggesting a solution to the problem.

“While the rest of the country had relief at the pump, Western New Yorkers were inexplicably saddled with high gas prices. Western New York families were being unfairly punished at the pump at a time when cash is slim and economic hardships are sizeable,” Schumer said. “A new FTC chairman will give us a good chance to get a quicker, public and more comprehensive investigation that will get to the bottom of this problem and make sure it doesn’t happen again. I will fight tooth and nail with Congressman Higgins to make sure the next FTC chair is on top of this issue.”

“In October we sounded the alarm on unjustifiably high gas prices in Western New York and since we stood up for ourselves we have seen gas prices fall in line with similar communities across the state. Still the FTC has yet to provide Western New Yorkers with the open and transparent investigation process we deserve," Higgins said. "I am pleased to join Senator Schumer in this fight for local consumers and look forward to working with the new FTC Chairman on improving this investigation and finally getting to the root of the gas price discrepancy in Western New York."

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.

To this day, the old FTC under the Bush Administration has yet to complete the investigation, has refused to make the findings open to the public and has not outlined the reasons or remedies for the disparity.

In an effort to prevent future gas disparities in Western New York, Schumer and Higgins today said they would press the next chairman of the FTC – who will be named by the new Obama administration shortly - for a quicker, more comprehensive and public study. Schumer and Higgins said an Obama Administration-named chair gave Western New York a chance for real solutions to the problem. Schumer and Higgins said they would press for four actions from the next chair of the FTC, including:

  • 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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