Gasoline price gouging complaints spur Kentucky, Maryland attorneys general into action

Michael Giberson

Kentucky: Attorney General Jack Conway filed a motion last week seeking a temporary injunction to force Marathon Petroleum Co. to return its gasoline prices to April 26 levels, the date the state’s Governor declared a state of emergency due to flooding. From WLKY.com:

Attorney General Jack Conway accused Marathon of illegally raising the price of wholesale gasoline during a state of emergency due to flooding.

 “The governor issued his emergency order on April 26 which put into place Kentucky’s price gouging law that says you can’t gouge on building supplies, you can’t gouge on hotel rooms and you can’t gouge on gas prices. Specifically we’re alleging they’re charging prices not based on their costs but instead based on their speculation,” Conway said.

… Conway wants an order forcing Marathon to roll back its wholesaler price to what it was before the emergency declaration.

On Monday a Kentucky judge declined to issue a restraining order against Marathon, saying he needed additional information. A hearing is scheduled for today. The motion was filed in Kentucky’s on-going price gouging case against Marathon, initiated in 2007 in response to gasoline pricing complaints post-Hurricanes Katrina and Rita in late 2005.

Kentucky law prohibits selling certain goods and services, including fuels, “for a price which is grossly in excess of the price prior to the declaration [of a state of emergency] and unrelated to any increased cost to the seller.”

Marathon claimed politics, as Tuesday this week was the state’s primary election and AG Conway was on the ballot; Conway dismissed the claim, saying he was unopposed in the Democratic primary. (Marathon noted that the 2007 case was filed by then Attorney General Greg Stumbo less than two weeks before the 2007 primary election in which Stumbo was seeking the Democratic nomination for Lt. Governor.)

In addition to the price gouging claims, the AG’s office has been pursuing an anti-trust investigation of Marathon. Coincidently, reports WHAS11 news, “Also Friday, the Kentucky Attorney General’s office announced it has completed its three year investigation of the 1996 merger of Marathon Petroleum with Ashland Oil.   Kentucky will forward the findings to the U.S. Justice Department.”

The Kentucky price is the green line in the chart above. More from LEX18.com, from WAVE3.com.

Maryland: Attorney General Douglas Gansler said Monday this week that he was “investigating a Rockville gasoline distributor after prices at the pump jumped 25 cents overnight last week.” Gansler noted, “Because Maryland lacks a price-gouging law… his office can do little beyond questioning distributors under consumer protection and antitrust law.” He doesn’t have price control authority, but he wants it:

Gansler said a state probe into gasoline prices could be stronger if Maryland had a tough price-gouging law. Twenty-seven states and the District of Columbia have passed such laws; efforts to pass one in Maryland have failed in recent years.

“It would allow an attorney general to issue subpoenas or issue inquiries to find out whether the price rise was justified or not,” and see what was behind it, he said.

My guess is that Maryland consumers are better off without state politicians having any ability or responsibility for deciding whether price increases are justified or not. (Note that Maryland does use it’s law enforcement powers to force gasoline prices higher when a store seems to be pricing too low.)

The Maryland price is in blue in the chart above. More on Maryland, from WJLA.com.

Elsewhere: In neighboring Washington, DC, “D.C. attorney general investigates gas station mogul” in response to allegations of anticompetitive practices. The DC AG said, “We have received allegations both from consumers and operators of stations that they are required to purchase at prices that are set on an anti-competitive basis…”

In New York, “A.G. Schneiderman Announces Comprehensive Review Of Gas Prices In Western New York.” The news release said:

Prices at the pump have led to an increase in consumer complaints to the Attorney General’s office, and Schneiderman has directed his staff to compile data on the prices charged by gas retailers, as well as information on the chain of distribution, to determine the cause behind the continued increases. Schneiderman cautioned that there may not be wrongdoing behind the price spikes, but said that if there is, he will take all appropriate action.

Another news release the same day said, “Attorney General Eric T. Schneiderman has been selected to serve on the federal Oil and Gas Price Fraud Working Group, joining a national team in monitoring the costs of energy commodities for consumer abuses.”

Elsewhere, price gouging enforcement Hugo Chavez style: “Venezuelan officials and soldiers inspected a warehouse of U.S. agribusiness giant Cargill Inc.  on Wednesday as part of a crackdown on alleged hoarding and price-gouging with foodstuffs. … Chavez over the weekend urged ministers to hunt speculators and said he would have no hesitation in expropriating any companies found guilty.”

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