Price Gouging on Propane Gas?

By: Beth Shayne Email
By: Beth Shayne Email

Their propane tanks line Lansing Road near Charlotte. Northwest Energy is a subsidiary of Inergy Propane based in Kansas City, Missouri.

That parent company, Grayling's Lawrence Friedman believes, is allowing a kind of price gouging so extreme it's illegal.

The lawyer, who lives part-time in Grayling, sued his local subsidiary, Gaylord Gas, after his last bill came in. In Friedman's case, his tank was filled in January--with gas that'd been marked up from $2.49 a gallon to $3.49.

"I assumed that was a mistake," Friedman tells us from his Manhattan office.

When he called the company, he learned it wasn't. He does not have a contract that locks his prices in. When he said he didn't want the gas, he was told it would cost $0.50 a gallon to remove it.

"That's kind of a trap," Friedman says. As he is a lawyer, he sued--and Thursday he won. The judge ordered Gaylord Gas take the gas back from anyone who was overcharged, and refund their money. Friedman says he's been contacted by hundreds of other customers.

After that favorable decision, he turned around and expanded the complaint--this time for all customers in Michigan. Inergy has subsidiaries in Owosso, Hillsdale, Brighton, Charlotte, and Fowlerville too. In addition to Northwest Energy, they go by McBride Oil and ProGas Propane, to name just a few.

"I think that it's an Inergy problem," Friedman says, "a corporate model."

Friday, Inergy declined to comment on the new complaint because it is so new, but in response to the Gaylord Gas decision said, "The company believes the ruling improperly dictates the price propane suppliers can charge consumers by ignoring the volatile marketplace and the business costs and expenses for the individual supplier."

The attorney general's office tells us they have at least 12 open complaints on the Inergy subsidiaries, but won't say if they are investigating. If you have an issue, call the Consumer Protection Division at 877-765-8388.


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