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Price Gouging on Propane Gas? Save Email Print
Posted: 4:50 AM Mar 1, 2008
Last Updated: 3:27 PM Mar 3, 2008
Reporter: Beth Shayne
Email Address: beth.shayne@wilx.com

A | A | A

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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Posted by: Page Landscape Location: Farmington Hills, MI on Apr 2, 2008 at 12:10 PM
You guys havn't heard anything yet! I just found out Amerigas (Waterford office) charged me $5.63/ gallon on 3/26/08 ! I checked my two previous bills and found they charged us $5.04/gal on 12/26/07, and $4.34/gal on 5/4/07. This almost goes beyond gouging to economic rape! I called and Sales Manager Dennis Mingle said "there had been some glitch and my recent bill should have been $2.89/gal, and he'd issue a credit. Said he thought they had called everyone, but must have missed us!" Right! Then he refused to adjust my previous bills. The Mich Public Service Commission website says the average price for propane for this past heating season was $2.49/gal.

Posted by: Jerry B. Location: Traverse City on Mar 22, 2008 at 12:17 AM
My propane bills are all over the board as well. The high this winter (so far)was in the $3.75 range (which I negotiated down over the telephone). It is funny how our current propane company brags about "service". By the looks of these posted comments, alot of us folks are getting "serviced". I found a new website www.LocalPropaneService.com that is supposed to have propane pricing information in the future.

Posted by: robert Location: flint on Mar 18, 2008 at 10:26 PM
reading all of the comments that people have sent sounds like its time to switch companies I've been with parker's propane in flint, bridgeport and now in howell for years the highest they got was 2.49 go to parkerspropane.com you can see 5 years of pricing why pay for the new customers gas everybody pays the same price no matter what size tank you have.

Posted by: chris Location: jackson area on Mar 10, 2008 at 02:19 PM
I am with Amerigas and my tank went empty on an 8 degree day. The leak test showed that thier regulator was leaking when they said I should have been at 30%. To make it up they charged me 2.88 a gallon and then took .32 off per gallon. Sounds like a sham to me. They even complained about not charging me the $200 special delivery fee even though I am on auto fill. Looks like price gouging on my fill to me.

Posted by: deb Location: hillsdale on Mar 7, 2008 at 10:28 AM
Blue Flame of Hillsdale did the exact samething, gas bill was $3.90, called they reduced it to $3.60 told them to come nad get my gas and water softern I get from them, they gave me the same .50 story per gallon to take it out... I will be calling the number listed in the article...SHAME on you !!!

Posted by: Matt Location: Jackson mi on Mar 7, 2008 at 06:19 AM
I have been a customer of Pearl Gas for four years now and I am very happy with there prices and service. Every year I get on there fixed price program and I call in for my gas when I am at 20%. They require 5 working days to fill my order as they have to work it into their schedule. I have a very fair price and will continue to be their customer for as long as I need propane.

Posted by: Patrick Apostol Location: Manistee & Lansing on Mar 5, 2008 at 04:58 PM
I called Amerigas last week for a fill at my up north house in Freesoil. $3.08 a gal. I called back to cancel and they lowered it 10%. The next day I called back again to change suppliers and they dropped to 2.26 a gal. What is it with these people???

Posted by: Anonymous Location: Jackson Mi on Mar 5, 2008 at 01:50 PM
I am with Pearl Gas in Somerset Center Michigan and I was charged $3.299 a gallon for propane gas a few weeks ago. They are the worst company I have ever been with. They take to long for delivery & they dont return calls. I ran out of gas on a Sunday after calling them 5 days before that letting them know I was at 10% and I needed gas and no one ever showed up that week. I called that Sunday night to let them know I was at 1% or less and they tried to charge me $125.00 for a deliver charge. They dont show up knowing I was at 10% with a 3000sq ft home and they want to charge me. The month before I had to call them as well, I was getting low after calling them to let them know my percentage and it took them 7 days and 2 phone calls for a delivery. Horrible company and I would never recommend them to anyone. They are also affiliated with NWP and any one in this area that is a call in customer, I am sure was charged the same price. I am looking into how to report Pearl Gas also.You should 2

Posted by: Anonymous on Mar 4, 2008 at 01:00 PM
Wow.. I was bummed when my price went to 2.549 this week. Up 15 cents from the beginning of February.Thats through Crystal Flash. I'm in Eaton County and have no lock in price (I missed it this summer) wish I hadn't.

Posted by: James A MacKeown Jr Location: Cape May County NJ on Mar 4, 2008 at 10:45 AM
Well well, looks like this $1.00 or more mark up is company wide as I am a customer of "Modern Gas" in NJ and they are one of Inergy's listed subsidiaries. In January 08 they drop shipped 100 gallons @ $3.89 per gallon because I did not like the way they wanted to carry forward a credit balance from a previous price lock contract to a new one. I elected to go with the market price. Now I see that a FAIR price might have been up to $3.00, but certainly not $3.89. I suspect that I will watch this situation unfold in your area and maybe follow Mr Friedman's case closely with the possibility of filing suite in NJ as well!

Posted by: Anonymous on Mar 3, 2008 at 10:57 PM
I am a customer of NWE (Eaton County) and am retired and disabled with a fixed and very low income. Imagine how hard it was to make the decision whether or not to make my house payment, buy my medication and groceries when NWE presented me with a bill in February for nearly $900 for a "minimum" delivery (I believe that's approx. 1/4 of a tank.) and I had had the tank filled in January! Well..eating peanut butter every day isn't a joy. Living with pain and illness and no medication is really hard. I DO still have my home (for awhile)..but lucky me...I HAVE HEAT! My home is well insulated, I keep the temp at a cozy 64 degrees, I save up and run my dryer maybe twice a month and keep my showers to about 2 minutes..and have been paying NWE an average of $550 a month for their heat. I wonder..do they subscribe to their own service to keep their families warm? Where do I sign up to join in the class action? My "minimum" fill won't last til warm weather!

Posted by: Teri Location: Webberville, MI on Mar 3, 2008 at 05:13 PM
Does anyone know how to get ahold of Mr. Friedman, the lawyer in the report? He lives part time in Gaylord but I believe is out of New York.

Posted by: Anonymous on Mar 3, 2008 at 02:43 PM
richard,you should ask the price when you order next time. u can probably lock a price next winter,but thats risky too. Boone Pickins is betting on much lower oil price by late summer. by locking you take fluctuating prices out but also know prices might go down after you lock. dont expect gas co to know either. some in govt want to keep oil high as poss so alterative energys make better sense.

Posted by: Mike Location: Eaton Rapids on Mar 3, 2008 at 01:04 PM
Does anyone know how to contact Mr. Friedman to join the new class action? I have a client who has had two deliveries this year at $349/gallon up over $1.00 from past billings. This customer is a very high volume user as well, so that is not an excuse for the high increase.

Posted by: Richard Location: Fowlerville on Mar 2, 2008 at 11:32 AM
I too was a victom of NWE of Fowlerville. Just pryor to Christmas I orderd gas and to my shock it was $3.49.Upon talking to neighbors it was a dollar or more than they paid from their gas companies at unlocked in prices.I will not be a victom again to this company.

Posted by: Anonymous on Mar 2, 2008 at 08:02 AM
things like this just hurt the economy.it makes it very hard on people who need gas to heat ther homes.it is causing hunger.it may hurt the amounts people are able to spend on other need items.many home heating prices very and this should be checked into.is it not bad enough we pay the prices we do to drive?people should get there money back that were over charged,and compainies fined high costs.things like this hurt peoples lives.it may not be there concern that kids and eldery and many are going hungry,or how much this kind of action is hurting the economy.greed hurts all.I'm glad this was caught.now who will do something about it and let the fuel co know it is unexceptable.laws need put in place to stop this from happening.and if caught the punishment needs to be severe.we can not help this state or country get back on it's feet,when this happens by people greed.if they now loose bussiness it is no ones fault but their own.the prices are too high as it is.it needs stopped.asap.

Posted by: Kristy Location: MI on Mar 1, 2008 at 07:05 PM
I have always thought something was up with the Propane prices. Having the pre-buy option , so you can supposedly lock in the low prices for the season, when all that does is gives the Propane Company time to use your money before you even get the propane delivered. I would be all for calling for a Full investigation of this. As It seems that it is one of those things you seem helpless in, because they know you need their product, so they think that they can tag the prices to what they want, regardless of anything else.

Posted by: Kelli Location: Albion on Mar 1, 2008 at 11:03 AM
The same exact thing happened to me two months ago with Amerigas. They tried to charge me $3.39 a gallon for propane they delivered, up from $2.39 a month prior to that. I called and complained, saying exactly what the article said - they were price gouging me. I checked and the national average at the time was $2.39, and they wanted to charge me a dollar more than that. I couldn't believe it. Also like the article, since I hadn't locked in a price, I was pretty much at their mercy. I would like to get in on a class action lawsuit as well, if there is one being considered against Amerigas. This goes to show you need to call around in the spring and get a locked in price then for the upcoming winter - otherwise they can try and gouge you.

Posted by: Teri Location: Webberville on Mar 1, 2008 at 10:29 AM
This is response to price gouging by NWE. We were a customer of NWE through the Fowlerville location. We had a delivery made in November and they tried to charge us 3.299. We called around and the going price was 2.259. NWE refused to lower the price when we called because they said we did not use enough fuel. We told them to come and get the tank. We had 122 gallons in the tank when they delivered the fuel in November that we want to be paid for at the price we paid them for it at 2.499 on 12/26/06. We are starting to think that price was inflated also. Of course we have not heard from them after 2 attempts to get a response since Decmber.

Posted by: tom Location: holt on Mar 1, 2008 at 08:01 AM
when man becomes greedy,the end results are always bad.many have this thing about getting in on the action.every one else does attuide.not thinking how it is hurting people.they think they have the power to do as they please.oil prices are all over who can bid what.showing power.food prices are so out of hand we must start cutting back the amounts of grain and food we send to other countries.but what else can we do?till all countries get over this high oil bidding the usa is just going to have to say no.many people will suffer over this.but the usa is having there throats cut by greed of other countries.we do not need to be greedy to our own here in the states.we need to work together to help our own citizens.the usa has help other countries for yrs.without us many will not be so well off.hurting us is hurting them.we surely don't need to hurt people here in the states.profit is one thing as long as it is fair.but so many prices are so high.and it is hurting many.so wrong.

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