Provides that no retailer shall engage in zone pricing with respect to any motor fuel of like grade or quality

Title of bill

An act to amend the general business law, in relation to providing that no retailer shall engage in zone pricing with respect to any motor fuel of like grade or quality

Purpose

To prohibit the use of zone pricing as a marketing device for gasoline.

Summary of provisions

Section 1: Subdivision 2 of section 399-ee of the general business law, as added by chapter 579 of the laws of 2008 is amended. Section 2: adds "retailer" to those entities who cannot engage in zone pricing

Existing law

Chapter 579 of the laws of 2008.

Justification

Zone pricing is a marketing technique currently used by petroleum companies. The company determines geographical price zones based on the demographics of a certain area. For example, if one area typically is more affluent than another, the tank wagon price, in other words, the price per gallon determined by the wholesaler, at which gasoline is offered for sale to the retailers may be slightly higher in that area, than an area where the clientele is primarily a working class neighborhood. Because the petroleum companies increase the amount charged to the service station dealers for the gasoline in those designated zones, this cost is then passed on to the consumers. Thus, the result of zone pricing is higher prices at the pump for individuals who are assumed to be able to pay more. This legislation would prohibit this discriminatory pricing policy.

This simple change merely adds retailer to those entities who are not permitted to engage in zone pricing with respect to any motor fuel of like grade or quality. This language should have been included in the initial legislation, so this is merely a small adjustment.

Legislative history

New legislation.

Fiscal implications

None.

Effective date

Immediately.