Newly sworn-in Federal Trade Commission Chairman Jon Leibowitz acknowledged that gasoline prices in Western New York have been ''unreasonably high'' and he will investigate the issue as quickly as possible, according to two of the region's representatives in Washington.
U.S. Sen. Charles Schumer, D-N.Y., and U.S. Rep. Brian Higgins, D-South Buffalo, issued a joint news release following a meeting Tuesday with Leibowitz. According to the two representatives, the FTC chairman will examine why local gas prices didn't drop nearly as fast as they did elsewhere across the country last fall and why prices remain higher on average in Western New York.
Both are calling for a quick, comprehensive and public investigation.
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Gasoline prices in Western New York remain higher on average than elsewhere across the country and fell at a much slower rate in October, November and December. The causes of this, which are being investigated by U.S. Sen. Charles Schumer, D-N.Y., and U.S. Rep. Brian Higgins, D-South Buffalo, remain a mystery. While some local gasoline retailers were reportedly making huge profits during this time, others say they were barely surviving. At the same time, many retailers have gone out of business. Wilson Farms on North Main Street in Jamestown has since ceased its gasoline operations.
P-J photo by Patrick Fanelli
''The bottom line is that Western New Yorkers were paying too much for gas for too long and we must know why,'' Schumer said in a statement. ''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.''
On Tuesday, the average price for a gallon of unleaded in Jamestown was $2.09, according to AAA, which predicted higher gasoline prices to come with oil nearing $50 a barrel. The nationwide average, meanwhile, remains $1.94.
At $2.09 a gallon, the price of a gallon of gasoline is almost $1.25 below what it cost this time last year. The price climbed sharply from there, costing motorists more than $4 a gallon during the tumultuous summer months. But a free fall ensued in October, November and December and the price was cut in half in a matter of months.
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''The bottom line is that Western New Yorkers were paying too much for gas for too long and we must know why.''
Sen. Charles Schumer
D-N.Y.
In Western New York, the price decreased at a much slower rate than other areas across the country. According to data provided by Schumer and Higgins, the price in Western New York was $3.40 a gallon on Oct. 21, almost 40 cents higher than in the Syracuse and Albany areas.
By Dec. 21, according to the data, the price held steady at $2.04 a gallon while the national average had dropped to $1.66.
The price disparity prompted Higgins to launch an investigation, which he says was impeded by the previous administration. He placed much of the blame on gasoline retailers, who at one point were reportedly making an average of 70 cents worth of profit on every gallon sold, 50 cents more than the national average.
''Last fall, Western New Yorkers were paying unjustifiably high gas prices and, despite repeated requests, local consumers were left with no explanation,'' Higgins said in a statement. ''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.' ''
According to Schumer and Higgins, while regional gas prices are now more in line with national and statewide averages, they still remain high and the reason for the disparity has not been officially identified.
Local gasoline retailers - at least those who operate independently owned stations and must buy their supply from wholesalers - said they were making far less profit than larger retailers who buy directly from the refineries.
Though many local retailers are running strong, some gas station owners said they have been barely turning a profit, and numerous stations in the area have recently gone out of business.