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April 3, 2009

 

DiNapoli: Drivers Overcharged for Gas at Some

Thruway Service Areas

Thruway drivers overpaid for gas, ranging from two cents to 26 cents a gallon, at some Thruway travel plazas because station operators did not follow contract requirements, according to an audit released today by State Comptroller Thomas P. DiNapoli.

“Customers paid more for gas on the Thruway than they should have,” DiNapoli said. “The amounts were small, but it can make a big difference to businesses and drivers who are frequent travelers on the Thruway. The Thruway is already hiking the tolls. Drivers shouldn’t be nickel and dimed at the pump too.”

In August, DiNapoli called on the Thruway Authority to post gas prices at rest stops on its Web site. The Thruway Authority acted on DiNapoli’s recommendation and now posts gas prices for every service plaza at www.nysthruway.gov/travelplazas/gasprices/index.html.

The Thruway Authority contracts with Sunoco and Lehigh (selling Mobil gas) to provide gas at the Thruway’s 27 travel plazas. Under the contract, the station operators must set gas prices based on the prices at other gas stations in the region. Sunoco and Lehigh are required to survey the prices of local gas stations on a weekly basis and adjust prices with the Thruway Authority’s approval.

To determine whether gas prices charged at travel plazas were in compliance with contractual limits, auditors examined the prices charged by a sample of eight stations over a four-month period from May 1, 2008 to August 31, 2008. Auditors found that three stations (Dewitt, Sloatsburg and New Baltimore) overcharged customers for gas from 2 cents to 26 cents per gallon. In total, auditors estimate that customers overpaid approximately $2,900 for gas. The other stations reviewed include Angola, Clarence, Guilderland, Malden and Ulster. In addition, auditors found instances when drivers paid more for gas because prices were changed a day earlier than they should have been or not implemented on the appropriate day. In total, drivers overpaid about $5,000 in these instances.

Auditors also found that the survey process to set the prices of gas was flawed and that vendors could use the process to ensure they received the highest price possible. For instance, the Lehigh stations requested additional surveys during May and June when prices were rising, but requested considerably fewer surveys when prices fell later in the summer. While these actions are allowable under the contract, the terms appear to be in the best interest of the stations, not Thruway drivers.

Auditors found instances when the Thruway Authority approved prices that exceeded the limits specified in the contracts. Auditors also found the Thruway Authority did not always effectively verify the accuracy of the reported gas prices at the surveyed stations.

The report contains 12 recommendations including amending the concession contracts to include damages for pricing violations. Currently, the Thruway Authority cannot assess any monetary damages when it detects a pricing violation.

The Thruway Authority, in response to the audit, has agreed to improve the process and launched its own investigation. The Thruway’s full response is included in the audit.

The gas price review is one of a series of audits released by DiNapoli on the Thruway Authority. The audits are intended to help the Thruway Authority identify operating efficiencies and revenue opportunities. Other audits released on Thruway Authority operations include an examination of toll hikes and capital projects. DiNapoli’s office currently has an audit underway of service plazas to determine if plaza operators are remitting the required revenues and other payments to the Thruway Authority.

Click here for a copy of the audit.


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