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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Comments are posted from viewers like you and do not always reflect the views of this station.
  • by Helen Location: chennai on Dec 16, 2010 at 01:39 AM
    Every dark night is followed by a bright sunny day. So, patience and attention is required and things will be fruitful in near future. ====================== Glasses Motorhome Guide
  • by Cindy Location: Haleyville, Al on Nov 15, 2010 at 06:02 PM
    We needed gas, we didn't lock in w/Dowdle Gas the price was going to be $3.89...We checked around and found another company who's gas for new customer is $1.59 and after that it is $2.09 regularly. They will be delivering our new tank in 2 wks....
  • by Carol Location: Sherwood, Oregon on Mar 9, 2010 at 08:49 PM
    In March 2010 we were charged $5.00 per gallon to fill an 100 gallon tank. March 9, 2010 outside the front door at Suburban Propane in Tigard, Oregon, we purchased 2.4 gallons in a propane tank for $2.85 a gallon. Suburban Propane in Tigard, believes that a $2.15 surcharge for delivery of 100 gallons is reasonable. The public is not really that stupid.
  • by Tim Location: Charlotte on Feb 8, 2010 at 08:56 PM
    We have had North West in Charlotte Michigan and did not lock in this year. We were Charged 2.79 a gal. plus taxes. My wife called all other propane places to see what they were charging. 2.29 was the highest price anyone was charging. She called Northwest to negotiate the price and was told they will not deal with us.. that's the price. She could not believe this knowing these guys just were in hot water for the same thing not to long ago. We live less than a mile from Northwest. Well to sum this up we have changed providers. We had Northwest come pick up the tank with there 250 gal. that they put in plus the 15% that was left in the tank. We have now been charged 223.74.. "Here is a breakdown" 17.50 late fee (we called as soon as it was delv. to work this out.) How can we have a late charge?. 125.00 labor, Tank Pick Up 75.00, 6.24 administrative fee. Not to mention what about the 15% that was in the tank before they put the 250 gal. in. I guess we just gave that back to them.
  • by Bennie Location: Virginia on Nov 24, 2009 at 08:30 PM
    I've read several sites and have experience with one national propane company, Inergy. There is a class action lawsuit against them in Michigan. Basically here's the scam. They lure you in with new prices. Then jack them up in the next year far beyond what other distributors charge. But you are already locked in with the minimum tank usage and prosepctive pickup charges. The so-called fixed rate is just part of the scam. Like credit card companies they make their money on people who don't realize that it's a scam. Those who understand the scam lock in at the so called fixed rate, which is simply a lower rate. Now you can say it's people not paying attention get what they deserve, but is this the kind of entrepreneurship that is the America I love. The last time I checked true American entreprenurship was about providing better quality at a lower price, not gouging the folks who are unaware to help your bottom line. It may not be against the law, yet. But it should be.
  • by Anonymous on Nov 22, 2009 at 07:58 PM
    I have had Problems with Ferrell Gas. years ago, I wont go into details cuz it would be too long..Needless to say, I told em to pick up their tank... and a few years later when my FOLKS were on Vacation in the winter, their tank ran out, the Day or two before they were suppose to be home. they couldnt come home to a Cold house, so when I called and told them about it..I Was told, that we werent scheduled to be filled for 2 weeks...And if i needed them to come fill the tank, There would be A DELIVERY Chg. I couldnt believe my ears. The tank ran out because the elderly couple *my parents Forgot about checking it in preparation for their vacation. Nobodys fault.. Innocent error..but when you call the Company youve done biz with for many years...and advise them of a serious situation like no HEAT..they tell ya they gotta charge ya a delivery fee, if I wanted it before the regular Fill date..Needless to say, When I told her forget it..and to pick up that tank too.
  • by Charles Location: Huntersville on Oct 13, 2009 at 08:59 AM
    What is this Price Gouging "stuff"? Are you Karl Marx? If you don't like the freaking price, Don't Buy It!
    • reply
      by Todd on Feb 23, 2012 at 11:03 AM in reply to Charles
      It is more about price deception than gouging. I'll be glad when it all is $10 a galllon and all comes to a grinding halt..........We'll see how your Karl Marx attitude is working for you then.
  • by Arik Location: Newburyport on Aug 27, 2009 at 10:24 AM
    There is this great site - lowermyheat.com, where you can run a free test and figure out if you're paying too much for oil and propane.
  • by Jackie Location: Utah on Aug 7, 2009 at 05:42 AM
    Response to Jeff in Idaho: Your propane company has done a fine job coaching you to publicly justify their high propane prices - safety, etc. Also, it is very noble of you to work for a company that underpays it's employees and operates trucks that get poor gas mileage. Are you bragging, complaining or asking for sympathy?
  • by Wildman Location: Michigan on Jul 16, 2009 at 06:00 AM
    In Michigan I am getting lock in pricing for 1.49 till march2010 ferrellgas. I did go all electric in the house just like cars are going electric. Only heat with propane and use electric heaters in the spring and fall when prices get over $2.00 a gallon seems to work for me.
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