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  • Writer's pictureThe San Juan Daily Star

Gasoline retailers sue DACO over price margins

A court filing by the Gasoline Retailers Association contends, among other things, that the Department of Consumer Affairs’ own rules do not provide a justification for ordering a gas price freeze that is still in force almost 90 days later.

By John McPhaul

The Gasoline Retailers Association of Puerto Rico on Monday filed a lawsuit against the Department of Consumer Affairs (DACO by its Spanish acronym) in Superior Court for arbitrariness and discrimination, arguing that an emergency does not exist to warrant the executive order maintained by the agency, which has frozen profit margins in the sector since Feb. 24.

“We must emphasize that there is an essential requirement for the determination of a declaration of emergency by the DACO Regulation, and that is the scarcity of products,” said Wilmarie Santoni, a legal adviser for the Gasoline Retailers Association, in the lawsuit. “We believe that, in the absence of the scarcity requirement, which has not existed in the country [Puerto Rico], Order 2022-003 of February 24, 2022 was premature, speculative, subjective and against the law.” The plaintiffs are asking the court for a declaratory judgment decreeing that Order 2022-003 be canceled and that, if applicable, it should freeze the current margin of issuance of the order and not with a narrow margin of 20 cents.

To support its claims, the lawsuit establishes various irregularities, arbitrariness, unequal and unfair treatment, among other justifications, but mainly that DACO Regulation 6811 itself does not provide a justification for the issuance of Order 2022-003, which is still in force almost 90 days later. According to the plaintiffs, the applicable regulations are clear, and DACO was prevented from imposing a freeze without the requirements of the law, since the emergency situation includes: accidents, terrorism, sabotage, vandalism, epidemics, strikes, illnesses, storms, hurricanes, earthquakes, tidal waves, floods and droughts. It also includes the shortage of products caused by a local and/or international crisis that alters or threatens to alter the economic and/or social order. War scenarios, the lawsuit claims, are not contemplated in the definition nor is there currently a product shortage.

The filing also indicates that the United States is not currently involved in the war, but more importantly, there is no shortage of product that justifies the order, which would be an essential requirement for it.

The lawsuit indicates that the listing justifying the freeze scenarios is specific. It does not end by indicating “among others” or “etc” to justify other alternatives or circumstances. Therefore, the “discretion” of the DACO secretary to determine the emergency has specific controls and conditions that limit his power to make such a determination. Under the list in Regulation 6811, the plaintiffs claim, DACO would be prevented from declaring the emergency because none of the listed situations has arisen on the island.

Through the association president, Esdras Vélez, the sector expressed feeling besieged since Hurricane Maria when, in three periods of several months, the DACO has frozen the profit margin of gasoline retailers, but this has not necessarily been the case with other sectors that also sell basic necessities or products in real scarcity.

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