Price Gouging During Hurricane Beryl – Explained

As Hurricane Beryl tore through Houston, residents were met with another storm—this time at the gas pump. The skyrocketing fuel prices left many Texans frustrated, and questioning the legality of price gouging during natural disasters.

In this blog, we’ll explore what price gouging is, the legal framework surrounding it in the United States, and how it ties into the broader issue of natural disaster fraud.

What is Price Gouging?

Price gouging is when businesses, often during a crisis like a natural disaster, jack up the prices of essential goods and services to ridiculous levels. It becomes a problem when applied to things people absolutely need—like food, water, and gasoline. Economics dictates that prices are driven by supply and demand. But during a crisis, price gouging crosses the line. Similar to the way a 10 minute Uber at peak rush hour can go from $8 to $18.

When it happens in the midst of a natural disaster and people are at their most vulnerable is when lawsuits happen. It’s like someone selling you a bottle of water for $20 just because they can. Not only is it unfair—it’s unethical.

Legalities of Price Gouging in the United States

Price gouging laws vary by state in the US, and although there aren’t any federal laws against it, there is likely a state law to protect consumers. In Texas, for example, the Deceptive Trade Practices Act prohibits excessive price hikes on necessary items if a state of emergency is declared. Violators can face hefty fines, and in some cases, criminal charges. On July 9th 2024, Jeff Landry signed a State of Emergency Executive Order due to the effects from Tropical Storm Beryl.

The following information comes directly from the Texas attorney general:

When you fall victim to illegal practices covered by the DTPA, you may have the right to sue for damages under the act.

According to Section 17.4625 this includes:

PRICE GOUGING DURING DECLARED DISASTER. (a) In this section, “designated disaster period” means the period:

(1) beginning on the earliest of:

(A) the date the disaster occurs; or

(B) the date of:

(i) the proclamation or executive order of the governor declaring the disaster; or

(ii) the declaration of the disaster by the president of the United States, if any part of this state is named in the federally declared disaster area; and

(2) ending on the 30th day after the date the disaster declaration expires or is terminated.

(b) Notwithstanding any other provision of this subchapter, Section 17.46(b)(27) applies only to an act described by that subdivision that occurs during a designated disaster period in this state.

The Aftermath of Hurricane Beryl

As Hurricane Beryl approached, gas stations in Texas experienced a surge in demand. Unfortunately, 2 shell stations took this as an opportunity to inflate prices.

Overnight, gas stations hikes prices up to 44% from the original price. The most extreme price surge happened in Baytown, where gasoline reportedly increased from $3.80 to $5.49 per gallon.

Natural Disaster Fraud

You might think of insurance scams or fake charities, when thinking of natural disaster fraud but price gouging fits into this category because it exploits the chaos and fear that comes with a catastrophic loss.

Natural disaster fraud undermines public trust and can exacerbate the challenges faced by those already struggling in the wake of a disaster. It also puts additional strain on emergency services, as people scramble to secure overpriced essentials, diverting resources away from more critical needs.

Price gouging during Hurricane Beryl serves as a reminder of the need to stay vigilant during hurricane, wildfire and earthquake season.

Working in a field that combats fraudulent behavior puts us at a position to ensure that profiteering doesn’t overshadow the real work of recovery.

In our natural disaster webinar we covered the different types of natural disaster fraud and recognizing the signs that may be overlooked.

Come back to our learning center for more on natural disaster fraud prevention! Missed our last webinar? Click here to register for next months course.

Read more about the Louisiana state of emergency statement here.

Information on Texas post-hurricane Beryl available here.