COLUMBIA, S.C. South Carolina Attorney General Henry McMaster said yesterday that seven state gas retailers have donated $500 each to the American Red Cross for Hurricane Katrina relief as part of a settlement resulting from an investigation into gasoline price gouging in the wake of last year's Gulf Coast hurricanes.
Our investigation determined that seven stations located in Laurens, Mauldin and Clinton charged an average $4.59 per gallon for regular unleaded gasoline without sufficient explanation, said McMaster.
The stations [image-nocss] included Pavan Food Stores, dba Mr. Chip, Laurens; Pavan Food Stores, dba L'il Cricket, Mauldin; Cornerstop No. 58, Clinton; Cornerstop No. 57, Laurens; Cornerstop No. 53, Laurens; BP Station, Laurens; Pik-N-Go, Clinton.
After receiving more than 1,500 complaints about suspected gasoline price gouging in the wake of last September's hurricanes, McMaster dispatched investigators to 20 counties and more than 100 individual stations.
He emphasized that his investigation revealed that on Aug. 31, 2005, most station owners were able to justify and document their price increases as a response to the supply and demand effect of market forces. Under our competitive economic system, high prices or quick run-ups in prices are not and should not be illegal absent certain compelling circumstances. Taking risks and making a profitor a lossis the American way, said McMaster.
The settlement was reached with the four corporate owners of the seven stations after being issued civil subpoenas, cooperating with the investigation and making a total of $3,500 in donations to the Red Cross without admitting to any wrongdoing.
Although the office received multiple complaints about the pricing decisions at several Enmark stations, a review of those decisions showed that the prices at the pump were directly caused by increases in wholesale prices.
McMaster also renewed his call on the General Assembly to pass the price gouging law he proposed last fall (H. 4316), which would give law enforcement the authority to investigate and prosecute criminal price gouging. Current state law only allows law enforcement to act during a state of emergency declared by the governor.
Absent criminal investigative authority, McMaster had pursued a civil investigation under the Unfair Trade Practices Act, which are much slower than criminal actions, much harder to prove and vulnerable to defensive statutory interpretation. Ultimately, McMaster determined that other than price gouging during a declared state of emergency, there are no statutes, civil or criminal, which effectively address price gouging in South Carolina. To effectively fight price gouging, we need authority to pursue price gougers in South Carolina when we are suffering an abnormal disruption of our market as the result of an event elsewhere.
In conjunction with the price gouging investigation, McMaster also met with members of the oil industry and several major oil companies.
He said in this instance he found no evidence of price collusion between major oil companies and believes that any further investigation of the major producers, due to their large size and worldwide reach, is more appropriate for the federal government.
A Senate Judiciary Sub-committee will take up H. 4316 this week. Click here to view the full text of the bill.
Click here to read McMaster's Retail Gas Price Gouging Report.
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.