Wednesday, July 02, 2008

20080701 - Price Gouging Has 'NEVER' Been Easier *sigh*

Faulty pumps gouging on gas

Inspections rare, penalties low for stations with inaccurate meters
by Max Jarman, Matt Wynn and Grayson Steinberg - Jul. 1, 2008 12:00 AM

If you're already mad about gas prices, prepare to get madder.

Besides paying prices at the pump that were unthinkable a few months ago, many consumers also are getting ripped off by the pump itself.

About 9 percent, or about 2,000, of the 20,400 gas pumps inspected this fiscal year by the Arizona Department of Weights and Measures since July 1, 2007, failed to pass muster.

Half of those were malfunctioning to the detriment of customers.

Pump operators either were physically shorting customers on gas, overcharging them by starting the price meter before gas started to flow (meter jump) or letting it run after the flow had stopped (meter creep).

An examination by The Arizona Republic of 1,547 gas-station inspection records spanning a broader period, from Jan. 2, 2007, to June 5, 2008, found that at least 380 locations had violations that resulted in customers being overcharged for gas.

The failed inspections produced 1,104 citations that drew fines of $300 to $500 per violation. A single station could rack up a number of violations if multiple pumps are found to be out of calibration.

Of the 1,104 citations, 453 involved pumps that delivered less gas than the customer paid for, 390 were cited for meter jump and 261 involved meter creep.

There also could be many more bandit pumps that have gone undetected.

Infrequent inspections

Arizona inspects its 66,000 gas pumps every three years, while most other states do it at least once a year. Paltry fines provide little incentive to repair malfunctioning pumps.

"Only one state, Texas, has less frequent gas-pump inspections than we do," said Sen. Robert Miranda, D-Phoenix.

Arizona has had trouble keeping to its every-three-year schedule. Last year, the department inspected only about 15,000 pumps. Inspections have jumped to more than 20,000 this year, largely because of pressure from Miranda and Arizona Gov. Janet Napolitano, according to Steve Meissner, a spokesman for Weights and Measures.

Understaffed agency

Miranda said the Legislature cut funding for Weights and Measures in the 1980s and it increased the time between inspections because of the loss of inspectors.

The department now has 22 inspectors that, in addition to gas pumps, must verify the accuracy of scales at package shippers, supermarket cash registers and other devices.

"We do what we can with what we have," Meissner said. "We have limited resources."

The department says that overall, 95 percent of the state's pumps are accurate, which mirrors the findings of a 2003 nationwide survey conducted by the National Conference on Weights and Measures. Each nozzle and each grade, including diesel, counts as a pump and is inspected.

Arizona's 66,000 pumps are mostly at the 2,051 gas stations that fall under the state's purview.

A disparity of 6 cubic inches draws a citation, Meissner said. There are 231 cubic inches in a gallon.

Among some of the major offenders, according to The Arizona Republic's record search:

• Six high-flow diesel pumps at Sunmart in Ehrenberg were off from 120 to 200 cubic inches in May 2007.

• Six pumps at Superpumper in Scottsdale had discrepancies from 10 to 32 cubic inches in April.

• Eight pumps at a Valero station in Phoenix dispensed from 7 to 17 cubic inches less per gallon than the meter registered.

Insufficient fines

At current prices for regular unleaded, a 6-cubic-inch disparity amounts to 11 cents per gallon.

"Over a year or more, that could amount to thousands of dollars," Miranda said.

The potential for a windfall profit and insufficient fines for abusers provide little incentive for pump owners to make repairs, Miranda said.

"It can cost $800 to recalibrate a pump, and the fine for a first-time offense is only $300," Miranda said. The fine is per pump. Multiple violations could draw a larger fine.

Miranda has proposed legislation that would increase the first fine to $1,000, and he is hopeful the increase in revenue would pay for more inspectors.

"We need to get (that) so that we are inspecting these pumps once a year, instead of every three years," he said.

The Department of Weights and Measures has collected $297,000 from 420 offenders since July 1, 2007, up from $212,700 collected from 343 offenders the 12 months before. This year, $3,100 in fines went unassessed because the pump or operator already had been fined the maximum allowed.

Annual caps are $5,000 per pump and $50,000 per operator. An operator with more than 100 stations in Arizona, such as Circle K, could be fined a maximum of $50,000.

Complaints on the rise

Meissner said that, besides scheduled inspections, the department also responds to complaints, which have been rising with gas prices.

The department has received 2,907 gas-pump complaints since July 1, 2007, compared with 2,583 for the same period a year earlier.

High gas prices are bringing pump issues to light that once went unnoticed, Meissner said.

"People are paying a lot more attention," he said.

Awareness of meter jump and meter creep are up nationwide because of the high prices, said Judy Cardin, chairwoman of the National Conference on Weights and Measures.

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