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Energy Expert Disputes Price Gouging Claims

TAMPA -- While Florida officials pursue a gasoline price-gouging investigation, some energy experts say sharply higher prices at the pump as Hurricane Dennis approached don't appear out of line, according to the Tampa Tribune.

State Attorney General Charlie Crist and the Department of Agriculture and Consumer Services have asked oil companies and gas stations for financial records, claiming they raised prices as much as $1 a gallon in one case after Gov. Jeb Bush declared a state of emergency July 7.

``We believe that they were price-gouging, trying to take advantage of people as they were evacuating,'' Crist told the paper. ``That's unconscionable.''

Mike Burdette, a senior analyst at the National Energy Information Center in Washington, D.C., said Florida gas prices before and during Hurricane Dennis rose in line with the increasing price of gasoline for August's contract. Those oil and gas futures prices directly influence what consumers end up paying at the pump.

``When I look at Florida prices in general, they are not out of line with the rest of the country,'' Burdette said.

From June 29 through July 7, the future delivery price of gasoline on the New York Mercantile Exchange skyrocketed 22 cents a gallon to $1.81 cents a gallon from $1.59 cents, he said.

That jump was prompted by the fear that an already tight supply of gasoline would get even tighter if Hurricane Dennis forced the shutdown of coastal refineries and oil rigs in the Gulf of Mexico, delayed shipping or knocked out pipelines, Burdette said.

The closest refinery to Florida, one in Pascagoula, Miss., shut down in early July and did not restart until this week, Burdette said.

``There are cases with hurricanes where there has been somebody taking advantage of people. It's certainly possible,'' Burdette said. ``But in the day- to-day gasoline business, we just don't see it.''

Crist disagreed. He said nearly 1,600 complaints about sharply rising gasoline prices flooded a hot line into his office after the emergency declaration July 7.

Under a state of emergency, businesses cannot raise prices on emergency necessities -- food, water, hotels, gasoline, lumber and generators -- to more than the average price over the 30 previous days.

``The concern that we had was that we saw prices go up over 30 cents a gallon within a 24-hour period of the governor declaring a state of emergency,'' Crist said.

Crist has asked for the financial records of Tate Oil Co., a distributor that delivers gasoline to Shell stations across Florida, and Motiva Enterprises LLC, the Houston-based supplier where Tate Oil purchases some of its gasoline.

At the Department of Agriculture and Consumer Services, Commissioner Charles H. Bronson wants the financial records of 44 gasoline stations across Florida.

The statewide average for a gallon of self-serve, regular unleaded gasoline was $2.23 on July 1, Burdette said.

It climbed to $2.24 a gallon on July 7, and then jumped 4 cents a gallon the next day and about three cents more July 9, he said. It has hovered around $2.31 a gallon ever since, Burdette said.

Jim Smith, president and chief executive officer of the Florida Petroleum Marketers and Convenience Store Association, defended price increases at retail gasoline stations across Florida.

RaceTrac, the Smyrna, Ga.-based company with the most stations targeted by Crist and Bronson, is a member of Smith's association.

He said he wouldn't defend the major oil companies. But they live and die based on market prices, Smith said.

``If the commodities market determines the price will go through the roof because of the storm in the Gulf of Mexico ... and they decide to raise prices 10 cents, that's what's going to happen,'' Smith said.

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