(Bloomberg News) The New York attorney general's office is looking into whether gasoline offered through the Craigslist website for as much as $8 a gallon is legal as motorists cope with retail shortages after Hurricane Sandy.
The price for fuel available in New York City and Long Island by some individual sellers on Craigslist, the online-classified ad site, was almost double the latest average city price of $4.102 published today by AAA, the largest motoring organization.
Drivers in the New York area have been forced to stand in hours-long lines or go to other states to fuel up after Sandy shut East Coast refineries and harbors, curbing gasoline production and imports. The storm made landfall Oct. 29 near Atlantic City, New Jersey. New York is also investigating complaints from consumers about price-gouging.
"A lot of times in the wake of a disaster, people are trying to find resources and the normal networks are blocked," Mark Skidmore, an economics professor at Michigan State University in East Lansing, said by phone yesterday. "So people find creative ways to get it in, but it's more expensive. They are providing a service in some sense."
Sixty to 65 percent of retail fuel stations are open in New York City, Michael Green, a Washington-based spokesman for AAA, said in an e-mail yesterday. The figure is 55 to 60 percent in New Jersey and 50 percent to 55 percent on Long Island.
A Craigslist advertisement offering $8 gasoline yesterday for delivery to Brooklyn or Staten Island was answered by a man who would only give his first name, Mike. The Coney Island, New York, man said he had sold between 50 and 60 gallons (189 to 227 liters) of the fuel after purchasing about 100 gallons in Connecticut.
A separate $8 a gallon listing was answered by a man who said he bought two drums of gasoline that hold about 70 or 80 gallons from friends who purchased the fuel in upstate New York. He said he was delivering the fuel to customers near Woodmere, Long Island, at a cost to him of about $7.50 a gallon, including transport. He declined to be identified because he said he wasn't sure if reselling the fuel was legal.
Melissa Grace, a New York City-based spokeswoman for Attorney General Eric T. Schneiderman's office, said yesterday the agency is looking into whether sales from Craigslist or informal networks are legal.
Craigslist didn't immediately respond to an e-mail asking for comment.
New York is investigating "hundreds of complaints" from across the state, mostly related to gas prices, Schneiderman said in a statement yesterday. The state's price-gouging law prohibits merchants from taking advantage of consumers by selling goods or services for an "unconscionably excessive price" during "abnormal disruption of the market."