CAPE GIRARDEAU, Mo. -- Missouri Attorney General Jay Nixon said that his office's investigation into retail gasoline prices in the aftermath of Hurricane Katrina has led to legal action being taken against the owners of 10 gas stations.
Nixon launched his investigation on August 31, two days after Katrina hit the Gulf Coast.
"This has been one of the most comprehensive investigations ever into gas pricing data in Missouri," Nixon said at a news conference in Cape Girardeau. "In a situation where prices were changing dailyand [image-nocss] sometimes several times a daywe examined market data for more than 50 stations around the state over a period for 10 days before Katrina and 10 days after. We looked at this 20-day snapshot in time to compare the margins between how much retailers paid for the gas, and how much they charged customers for the gas. That margin was the focal point of our investigation."
Nixon filed suit in Greene County Circuit Court against Express Lanes Inc. in Springfield, Mo. The lawsuit alleges Express Lanes' profit margin on gasoline increased by more than 400% in the days after Katrina hit the Gulf Coast. Nixon is asking the court to order the defendant to pay penalties to the local school fund.
The Attorney General also filed nine assurances of voluntary compliance with circuit courts around the state. The owners of those stations, which Nixon had investigated for allegations of price gouging, will pay a total of $6,750 to the local school fund and have agreed to comply with Missouri consumer protection laws. An additional $4,000 has been suspended, pending their compliance.
Those stations are:
Travel Centers of America, Matthews, $2,500. Pierce Petroleum, Poplar Bluff (2), Wappapello, $1,000. Jiffy Jim's, Caruthersville, $750. 24-7 Minimart, Doniphan, $750. Duckett Truck Center, Poplar Bluff, $750. Ross Oil Corp., Piedmont, $500. Snak Atak, Joplin, $500.In most cases, Nixon said, the penalties will wipe out the profits made by the stations. Consumers, however, will not be compensated for their losses.
Ronald J. Leone, director of the Missouri Petroleum Marketers & Convenience Store Association, criticized Nixon. Leone told the Joplin Globe that prices at the pump are going to spike and remain volatile before, during and after a natural disaster. Unfortunately, the attorney general does not understand the complexities of the global crude-oil market, and the pricing and selling of fuel at retail, he said. To expect fuel prices to remain stable and low during this extended crisis is completely unrealistic.
Leone said the fact that the AG accused such a small number of fuel retailers of price gouging out of the 3,500 stations and convenience stores in Missouri proves that the problem is not widespread.
Luis Ilano, operations manager for Snak-Atak, told the newspaper that the investigation papers were hand-delivered to the station on September 7. The $500 penalty, he said, already has been paid. Our normal procedure is to check the gas pricesin Webb City and match whatever the prices are at that location, he said. We did that, and we did it with all of our stations. I don't know why the [Joplin] station was singled out. We were the same as the other ones.
Ilano said the company intends to be more careful in the future when it sets prices during a natural disaster or national emergency. Ilano would not disclose how much the station's profit margin increased after Katrina struck, but said it was not as high as the 400% increase cited by Nixon at the station in Springfield.
"When retailers take advantage of a situation like these natural disasters and their actions prevent consumers from making rational buying decisions, it is appropriate for the Attorney General to act," Nixon said. "This is very much like the situation we saw right after September 11 [2001]."
Some 48 station operators settled with Nixon's office as a result of a similar investigation after the terrorist attacks.
Nixon's investigators reviewed billing and pricing documents from stations across Missouri where consumers had complained of high prices, as well as thousands of gasoline receipts from state vehicles. Nixon also credited the assistance of the Missouri Department of Natural Resources' Energy Center and the Missouri Department of Agriculture in helping with field work to investigate complaints of gasoline price gouging.
There's not a lot we can do about the big oil companies, refineries and pipelines, Nixon said. But we can do something about what retailers bought it for and sold it for.
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