THOMPSONVILLE, Ill. -- Calling the threat by Illinois Attorney General Lisa Madigan to sue 18 gas station owners "a grandstand move," David Payne told The Southern Illinoisan that there is much more to the story about alleged gasoline price gouging than has been reported.
Payne is the owner of Payne's Service Station in Thompsonville, Ill., and is one of the station owners who”as reported in CSP Daily News”agreed to donate $1,000 each to the American Red Cross to avoid being sued by Madigan, who claimed that price gouging took place in the [image-nocss] days after Hurricane Katrina.
"The news that has been released so far, all of it from the [AG™s] office, really has not done justice from the store owner's standpoint," Payne told the newspaper. "The only point of view that the public has heard is the attorney general's, and there's a lot more to this story."
Madigan's office sent letters right before Christmas and gave station owners until January 5 to decide whether to make the donation or risk being sued. Prior to the deadline, all 18 stations have agreed to settle, the report said.
Payne said he finds it "frustrating" that nobody has explored the other side of this story. "Basically, [the AG™s office made] it sound like they have offered everybody a sweet deal to pay the $1,000 to make this go away," he told the paper. "Nobody has pointed out that we have the paperwork, the documentation in black and white that shows exactly what we paid for our gas. We showed them exactly what we paid for that one load of gasoline, and we're talking about one load of gasoline here, which we received on the morning of September 2, post Hurricane Katrina. We raised our prices on gas exactly to the penny what our distributor raised the price. We showed them the hard evidence, and they ignored it."
Payne said his business is independently owned and said his gasoline was priced at $2.59 per gallon prior to Katrina. He also said he only changes prices after he receives a load of gasoline. "After the hurricane hit, we were still selling gas for $2.59 a gallon, and many places had already raised their prices before they got their next load of gas," Payne said. "I want to emphasize that we adjust our price up or down when we get a load of gas, period."
Payne gave the paper a rundown of the events that led to the allegation of price gouging. On September 1, he said, gasoline was priced at $2.59 per gallon and he was expecting a load of gasoline before his store closed at 11 p.m. He said his distributor could not give him an exact amount that gasoline was going up, but only that it was "going up a bunch." Payne said the gasoline did not arrive on September 1, but before he closed for business that night he increased his price 40 cents per gallon to $2.99 in anticipation of the delivery the following morning.
Payne said he opened for business at 5:30 a.m. September 2, and the gasoline arrived at 7:40 a.m.; it was then that he learned that instead of gasoline going up 40 cents the increase was actually $1 per gallon, so he increased his prices to $3.59 per gallon. He stressed again that his cost went up $1 and he raised his prices exactly the same amount.
"I don't see how that can be considered gouging," Payne said. "I didn't price my gas any differently than I ever do. I think the [AG] really misled the public in the way this was presented. It was never taken into consideration what the cost of our gas is in all of this. The people I talked with from the attorney general's office didn't even know that I received my gas from a distributor; they thought I got it straight from the terminal. These people didn't even know how the process works. They didn't realize that there was a middle person in the process."
Bob Bolanowski owns AJ One-Stop in Anna, Ill., another of the stores targeted for alleged price gouging, and three other c-stores. He told The Southern Illinoisan that he purchases gasoline on a commission basis with other oil companies. "Basically, what I do is just match what the other stations are in town," he said. "I'm the littlest guy in town and I've never, ever set the price myself. I'm the little guy and the major chains sell three times the gas I do, so I just follow their prices."
Bolanowski said at no time during the days before or after Katrina was his gasoline priced any differently than the other stations in his immediate area. "It's incredible to me that they can say we were gouging when there's a convenience store on every corner and I'm located 15 miles from Cape Girardeau," he said. "How can it be price gouging when you can drive down the road a half a block and buy gas for the same price? How are you holding people hostage when a dozen places in town are selling at the same price."
Bolanowski agreed with Payne that the AG targeted small, independent owners. "It would be crazy to try and fight it, I even had an attorney tell me that," he told the paper. "I was also guaranteed by the [AG™s] office that there was not going to be any negative press on this and then the next day it was splashed all over the newspapers like we were trying to take advantage of our customers, and that's just not the case."
Payne said he paid close attention to gas prices during the time frame in question and finds it remarkable that only independently owned stations were targeted by Madigan. "I think this was a grandstand move on the part of the attorney general," he said. "If you look, all 18 stations are small, independently owned businesses. They didn't get go after the large chain stores; it was all individually owned stores. While all that was going on with¦Katrina, some of the chain stores with national names were raising their prices three times a day, and we all know that they were not getting three loads of gas a day. They raised it according to the news about the hurricane and getting all the market could bear and people were still lined up at the pumps."
When asked why he agreed to donate the $1,000 instead of fighting the allegations, Payne said his decision was not based on an admission of wrongdoing, but rather a matter of economics. "They will not send letters to the major chains demanding $1,000 because they know they have lawyers on retainer that will fight it," he told the paper. "They single out the individual business owners, and that's the key point that's been missed here. They know that I'm not going to go out and hire an attorney and fight this for maybe a year in court just to prove my point, even though I've got the documentation in black and white that can prove my point. I'm not going to go out and spend $5,000 or $10,000 to prove a point."
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