The unbelievably coincident gas price roller coaster

This morning’s Burlington Free Press reports a development in the courts: attorneys for Chittenden County gas wholesalers have filed a motion to dismiss a lawsuit alleging price-fixing in the market, which is dominated by a handful of outfits. Former US Attorney Tris Coffin, having traded in his white hat for a shiny black Downs Rachlin Martin number, is now spearheading the gas cartel’s defense.

Sorry, make that “the alleged gas cartel.”

This news brought to mind the latest pair of coincidences in the long and suspicious history of gas prices in the Burlington area. This past July, when the suit was freshly filed, I noted a rare happenstance: gas was actually cheaper in Burlington than in Montpelier by as much as 15 cents per gallon. This reversed the usual state of affairs, in which Burlington-area stations routinely offer some of the highest prices in the state.

At the time, I connected the obvious dots: bad publicity triggers a temporary drop in prices at the pump. Or as I put it:

For years, Bernie Sanders has been alleging price fixing by the four companies that own most of Chittenden County’s gas stations. The companies have consistently denied any collusion — although, it must be noted, they usually bring down their prices for a while after Bernie kicks up a fuss. And then quietly goose them back up once the heat’s off.

Well, it’s happened again. The suit’s been out of the headlines for a few months, and whaddya know, the vast majority of Burlington-area gas stations are charging 10-15 cents more per gallon than their Montpelier counterparts.

But the wholesalers insist that mere facts don’t prove the case — even when those facts form a long-term, coherent pattern. In his motion to dismiss the lawsuit, high-profile gas man R.L. Vallee set a very high bar for the existence of a conspiracy:

“While Plaintiffs claim in conclusory, and cloak and dagger, fashion that Defendants formed a cabal through ‘secret meetings and conversations, often at undisclosed, out-of-the-way locations’ to conspire to fix gasoline prices, Plaintiffs conspicuously fail to allege any facts in the Complaint of these meeting and conversations — no dates, times, places, participants, discussions, or outcomes. That is because those meetings and conversations never took place.”

Yeah, well, just because you don’t gather in abandoned warehouses or smoke-filled gentlemen’s clubs doesn’t mean you’re not artificially enhancing profits. Today’s cartel operator is far more sophisticated than his Gilded Age antecedent; he knows how to do his business while avoiding excess theatricality.

But the effect is the same. Gas prices are where they usually are: higher in Chittenden County than elsewhere. Even in places much more remote than Burlington. (Gas is cheaper in Derby, for Pete’s sake.) And the footprints are clear: when there’s a burst of publicity, gas prices come down. Once the heat’s off, they sneak back up.

If the wholesalers want to make a believable case, they might want to take care that their actions don’t so clearly belie their words.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s