FRANKFORT, Ky. -- Kentucky Attorney General Greg Stumbo said his office has subpoenaed 13 petroleum refiners and wholesalers demanding gasoline price data for the time of the state of emergency in the wake of hurricanes Katrina and Rita. He has also issued subpoenas to 30 Kentucky retail gas stations demanding justification for the increased prices charged to consumers during the same period.
Across the board, profits by big oil companies strongly suggest possible price gouging, Stumbo said. My office also suspects profiteering by retailers and suppliers [image-nocss] since gas prices rose dramatically following the hurricanes.
On Aug. 29, 2005, the AG urged Governor Fletcher to declare a state of emergency and implement the Kentucky Price Gouging law, KRS 367.372-378, and a declaration was issued later that day implementing the law. Under Kentucky's law, no supplier of essential consumer products, including gasoline, may sell the products for a price which is grossly in excess of the price charged prior to the declaration and unrelated to any increased cost to seller. On Sept. 1, 2005, Stumbo sent letters to oil refiners and marketers urging restraint during the time of emergency.
Also in September, the AG established a consumer hotline and email address to field reports of possible price gouging. To date, more than 600 complaints have been reviewed, he said. In January 2006, Stumbo hired an expert witness in petroleum matters to assist in the investigation.
Stumbo continues his work with national and regional task forces of Attorneys General to determine if state or federal laws have been violated in connection with the increased gasoline prices. The information we have gathered so far strongly suggests that oil refiners and middlemen have taken advantage of a national crisis and consumers are paying the price at the pump, he said.
And in Wisconsin, state authorities would have the power to warn and fine gas stations for price gouging under a bill (SB 358) the state Senate approved Wednesday, reported the Associated Press. Wisconsin currently has no anti-gouging laws. The only state laws restricting gasoline prices prohibit changing prices more than once a day and charging people in line for gasoline a new price posted while they are waiting, according to state Department of Justice officials.
The Republican-authored bill would prohibit selling consumer goods and services, including gasoline, at excessive prices during an emergency declared by the governor.
The Department of Agriculture, Trade & Consumer Protection would draft formulas to determine when prices become unreasonable. That agency would first issue warnings to violators. If they do not comply, the Agriculture or Justice departments could issue warnings or file lawsuits seeking up to $10,000 in forfeitures and an injunction.
The Senate approved the bill 29 to 1, sending it to the Assembly. That body must pass an identical version before Gov. Jim Doyle (D) could sign it into law.
The Assembly last week passed its own gasoline price-gouging bill. That bill (AB 786), a bipartisan compromise measure, would have given the attorney general the power to investigate and prosecute gasoline prices that grossly exceed the average price from the previous year.
State Senator Dave Hansen (R) said the Senate bill does not go far enough and has no teeth. Authorities could simply choose to issue warnings rather than fines, he said. He tried to substitute the Assembly bill in the Senate's place during debate Wednesday, saying there was no guarantee the Assembly would take up a new bill. His motion failed.
Sen. Neal Kedzie (R), who wrote the bill, countered the Assembly bill would give the AG too much power and does not define excessive prices. The measure also would protect consumers from unfair prices on all kinds of things, not just gas, in a disaster, he added, imploring Democrats not to allow emotions over high gasoline prices to narrow their thinking. We should not be so shortsighted, Kedzie said. A bill like this puts everybody, retailers and wholesalers, on notice.
Senate Minority Leader Judy Robson (D) attacked the bill as Republican grandstanding that will have little real effect. Go home and write your press releases, she said.
Still, all the Democrats in the chamber, including Robson and Hansen, voted for the measure. The only senator to vote against it was Cathy Stepp (R). She said the real drivers of high gas prices are growing demand and big government. She called on the state legislature to address gasoline taxes in Wisconsin. Government is the gouger, she said.
The Senate was expected to take up a bill yesterday that would repeal the state's minimum markup law on gasoline. Under the Unfair Sales Act, gasoline wholesalers and retailers must add at least 9% to the price consumers pay. The 1930s-era law is supposed to prevent large companies from driving smaller competitors out of business.
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