New York State Legislature votes to prohibit ‘zone pricing’ for fuel

| 8/21/2008

Meeting in special session, New York state lawmakers voted Tuesday, Aug. 19, to approve legislation that would fine fuel companies for pricing gasoline and diesel higher in certain areas. It now moves to Gov. David Paterson’s desk.

Sponsored by Sen. James Alesi, R-Perinton, the bill would prohibit establishing price zones based on demographics. Fuel companies found in violation would face fines up to $10,000.

Supporters say the protection is needed because petroleum companies use “zone pricing” to boost fuel prices in areas where there is limited competition.

“We’re continuing to see sky-high prices for (fuel),” Alesi said in a written statement. “One of the underlying contributors to the high (fuel) prices, especially in upstate New York, is a little known practice known as ‘zone pricing.’”

Advocates for the legislation say petroleum companies implement zone pricing to determine geographical price zones based on the demographics of a certain area. Fuel retailers that are charged more then pass those increased costs onto their customers.

If signed into law, the bill – S175 – would take effect 60 days after it is signed into law.

To view other legislative activities of interest for New York in 2008, click here.

– By Keith Goble, state legislative editor