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State Senator

Joseph J. Crisco, Jr.

Chief Deputy President Pro Tempore
& Federal Relations Liaison

Representing Ansonia, Beacon Falls, Bethany, Derby, Hamden, Naugatuck & Woodbridge

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Contact: Andrew Ammirati
860-240-8671

March 19, 2012

Crisco Hails Initiative To Stabilize Retail Gas Prices; Says Tax Cap, Consumer Protections Will Help

Proposal meant to protect consumers from profiteering

photo of Senator Crisco

Senate President Donald Williams (center) joined Senator Crisco (second from right) and other Democratic leaders of the General Assembly in announcing plans to help provide relief at the gas pump and protect consumers from profiteering and price gouging by big oil wholesalers. (March 19, 2012)

State Senator Joseph J. Crisco, Jr. (D-Woodbridge) today welcomed a legislative initiative, proposed by the Democratic leadership of each chamber, to help stabilize gas prices, which have increased as much as 15 percent since the first of the year. Senator Crisco said the six-point plan will help provide relief at the pump and protect consumers from profiteering.

“Most Connecticut families require gasoline—despite high prices—to travel to work and school, and to shop and keep important appointments, so unfortunately other aspects of family budgets are squeezed when gas prices keep climbing,” Senator Crisco said. “Our proposal will address gas prices directly, with a limit on the wholesale price to which the state tax would apply, and give the state Attorney General and state Department of Consumer Protection more authority to investigate price gouging and profiteering.”

“Working families are feeling the pressure of skyrocketing gas prices,” said Senate President Donald E. Williams (D-Brooklyn). “Our plan will provide some relief at the pump at a time when folks are struggling to make ends meet and at the same time ensure that big oil wholesalers don’t drive up the price of gasoline. Most of all, this plan puts big oil companies on notice that we won’t stand for them profiteering and taking advantage of consumers.”

The Democrats’ plan:

  • Caps the gross receipts tax (GRT) on motor fuels at $3.00/per gallon wholesale, upon passage.
    • Sunsets 6/30/13.
  • Prohibits oil wholesalers and distributers (those who pay the gross receipts tax) from passing on anything purporting to be based on the tax for the portion of any sales price over $3.00 per gallon.
    • Any such overcharging a Connecticut Unfair Trade Practice Act (CUTPA) violation.
  • Amends the petroleum profiteering statute, C.G.S. § 42-234 et seq. (“abnormal market disruptions”) to include an automatic trigger based on extreme wholesale price increases, for price gouging protections to go into effect.
    • Puts everyone in supply chain on notice of serious penalties for increasing their profit margins during such disruptions.
  • Legislatively declares an “abnormal market disruption” upon passage for a set period of one month in anticipation of further wholesale price spikes.
    • The wholesale price at the Port of New Haven is up $.13 since 3/1/12;
    • The spike has not hit the pumps, with average retail prices rising only $.02 cents since 3/1/12 from $3.99/gal to $4.01/gal.
  • Grants the commissioner of the Department of Consumer Protection authority to impose CUPTA fines of up to $10,000 upon large gasoline wholesalers and distributors who are in violation of profiteering laws.
    • This will strengthen the Commissioner’s authority, necessary because large wholesalers in violation of profiteering statutes have much greater impact on consumers than individual retailers.
  • Institutes similar profiteering protections in regards to home heating oil.

Moderate- and lower-income families feel the rising price of gasoline especially hard. According to a recent report by the Brookings Institute:

“Every dollar increase, holding the number of miles driven constant, would cost these moderate- and lower-income households an extra $530 per year. For a family with an annual income of $20,000, this is an additional 2.7 percent of their total income. Although higher gas prices eventually encourage consumers to cut back on driving or switch to more fuel-efficient vehicles, in the short-run they may have few options but to cut back on other expenditures in the family budget. Since low- and moderate-income families spend most of their income on average, in the very short run they can only choose between spending less on other items and going further into debt.”
 

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Andrew Ammirati
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