Judge Thomas Wingate set a hearing for Thursday morning, where experts on wholesale gasoline prices are expected to testify, said the report.
Attorney General Jack Conway filed a motion Friday alleging that Marathon had violated an emergency order issued by Governor Steve Beshear in [image-nocss] late April after heavy rain caused widespread flooding, mostly in western Kentucky. The state of emergency prohibits price gouging during disasters. (Click here for previous CSP Daily News coverage.)
Conway asked the court to temporarily stop Marathon from charging more for gasoline than its wholesale price on April 25.
Conway's office alleges that Marathon raised prices while the emergency order was in effect, despite no comparable increase in costs to the oil company. Gasoline prices, in some cities, jumped 30 cents overnight.
"Kentucky consumers are suffering at the pump," said Liz Natter, a deputy attorney general, during a brief hearing Monday before Wingate, according to AP. Gasoline prices in many major Kentucky cities including Lexington topped $4 a gallon last week.
Sheryl Snyder, a lawyer for Marathon, told Wingate that the only reason the AG's office was seeking an injunction, which would freeze gasoline prices, was because Tuesday was Election Day. Conway is unopposed in the Democratic primary for AG.
Conway later dismissed the argument, saying he was doing his job by sticking up for Kentucky consumers, AP reported.
Snyder said wholesale gasoline prices have dropped already, and if an injunction was granted, Marathon would have to raise gasoline prices back to the price of April 25. But Conway and lawyers for his office countered that they wanted to ensure that Marathon did not continue to raise prices even if gasoline prices had recently gone down.
The motion was filed as part of an ongoing lawsuit against Marathon and its wholly owned subsidiary, Speedway LLC, for alleged price-gouging violations after Hurricanes Katrina and Rita in 2005.
Separately, Maryland attorney general Douglas F. Gansler, who was considering an investigation into a Rockville gasoline distributor after prices at the pump jumped 25 cents overnight last week, is not pursuing the investigation, a spokesperson told CSP Daily News.
"There was no investigation," said Raquel M. Guillory. "They responded very quickly and we were able to determine that the increase they were charging stations was simply a result of the increase they were paying.
Gansler told The Baltimore Sun that Empire Petroleum Holdings, which serves gas stations in Anne Arundel and Montgomery counties, cooperated with his investigation, which he said he launched in response to a consumer complaint.
Empire did not respond to a request for comment by the newspaper. Retailers served by Empire told the Sun that the distributor blamed the price hike on flooding in the Midwest, Gansler said during an appearance at a Baltimore gas station Monday with Senator Benjamin L. Cardin (D-Md.). He said prices dropped by 13 cents the day after he sent Empire a letter.
Gansler said he had not sent similar inquiries to other distributors in the state, "but that doesn't preclude us from doing so in the future." Because Maryland lacks a price-gouging law, he said, his office can do little beyond questioning distributors under consumer protection and antitrust law.
Station operators said they have become the focus of customer anger, an industry spokesperson told the paper, even though they earn only a penny or so per gallon. "When we talk about the dealers, we are talking about the consumers," said Roy Littlefield, executive director of the Washington, Maryland, Delaware Service Station and Automotive Repair Association. "Credit-card companies are making more than the dealer."
Gansler said a state probe into gasoline prices could be stronger if Maryland had a tough price-gouging law; 27 states and the District of Columbia have passed such laws; efforts to pass one in Maryland have failed in recent years, said the report. "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.
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