$99 for bottled water: Price-gouging in wake of Hurricane Harvey

One station sold gas for a whopping US$20 a gallon ($27 for 3.8 litres). A hotel reportedly charged guests more than twice the normal rate. One business sold bottles of water for a staggering $99 a case - more than 10 times some of the prices seen online.

As people in southeastern Texas face the devastating floodwater left by Hurricane Harvey, they are also grappling with predatory businesses that are selling basic necessities at astronomical prices. As of Wednesday morning, the state attorney general's office had received 684 consumer complaints, most of which involved price-gouging of bottled water, fuel, groceries and other necessities.

"Anytime catastrophic storms hit Texas, we witness the courage of our first responders and the generosity of neighbours coming together to help their fellow Texans," Attorney General Ken Paxton said. "Unfortunately, in the wake of the damage from storms and flooding, we also see bad actors taking advantage of victims and their circumstances."

In a few cases, people reported having to pay $3.50 a gallon for gas in Houston, about $1.30 more than the average gas price in the area, said Kayleigh Lovvorn, a spokeswoman for Paxton's office.

A Houston convenience store charged $20 a gallon, she said. It's unclear if the jacked-up rates were the result of price-gouging or if the shutdown of refinery operations in the wake of Harvey was a factor, but the attorney general's office is investigating.

Meanwhile, some businesses sold water bottles for $8.50 each and cases for $99, Lovvorn said.

"These are things you can't do in Texas," Paxton told CNBC on Tuesday. "There are significant penalties if you price-gouge in a crisis like this."

The death toll from the hurricane has climbed to the double digits, as the devastating storm made landfall Wednesday morning in Louisiana.

State law prohibits businesses from charging exorbitant prices for necessities during times of disasters. Offenders could face penalties of $20,000 per incident, Paxton said. If victims are age 65 and older, the penalty is more than 10 times higher - up to $250,000.

Lovvorn said she cannot give the names of the businesses cited in the complaints. Twitter users have shared a picture of bottled water being sold Friday at a Houston area Best Buy for more than $42 a case. The company said a few store employees decided to sell cases of bottled water even though Best Buy does not sell them by the case.

A man drains his boots while preparing to rescue cattle from the Liberty Bell Ranch in the wake of Tropical Storm Harvey. Photo / AP

"This was clearly a mistake on the part of a few employees at a single store," Best Buy spokesman Shane Kitzman said. "We feel terrible about this because, as a company we are focused on helping, not hurting people affected by this terrible event. We are deeply sorry that we gave anyone even the momentary impression that we were trying to take advantage of the situation."

Kitzman said the company does not have pricing in its computer system for cases of water. The employees priced the cases by multiplying the cost of one bottle by the number of bottles in a case, "arriving at a number that is far, far higher than normal", Kitzman said.

At a Best Western location in Robstown, about 32km west of Corpus Christi, 40 guests were reportedly charged far above the normal rate. The overcharging was uncovered by ABC affiliate KXAN. A crew from the station booked a room and was charged US$289.99 a night, according to KXAN. The total, US$321.89 including taxes, is nearly three times the normal rate of US$119 a night.

Best Western spokeswoman Kelly Dalton said guests at that hotel have been reimbursed. She said the company is severing ties with the Robstown location, describing the actions as "egregious and unethical".

In Corpus Christi, a RaceWay gas station drew ire after a woman posted a Facebook video in which she said she was charged nearly US$70 for two cases of beer, ABC News reported. RaceWay told the station that the overpricing was caused by a clerical error, not price-gouging. Ashleigh Womack, spokeswoman for RaceTrac Petroleum, which owns Raceway, said the store in question is operated by an independent contractor who has control over pricing of store merchandise.

"Nevertheless, we take these allegations seriously and are investigating them with the operator," Womack said.