Kentucky Attorney General Accuses Marathon of Price Gouging

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Kentucky Attorney General Accuses Marathon of Price Gouging


FRANKFORT, Ky. -- Kentucky citizens who think that gas prices are too high might not be wrong, according to Attorney General Jack Conway, who last week accused Marathon Petroleum Co. LLC of illegally raising the wholesale price of gasoline and other motor fuels in Kentucky markets. The price jump added to the stress of Kentuckians who have been coping with heavy rains and flooding.

"I want to thank Kentuckians who called or e-mailed our office to report the drastic changes in gas prices that reached more than $4 a gallon at the pump in many communities," said Conway in a prepared statement. "Gas prices jumped about 30 cents overnight. The tips provided by consumers and retailers helped us bring this action that will hopefully provide some relief for Kentuckians who are struggling to put gas in the car and clean up from flooding."

Conway filed a motion for a temporary injunction in Franklin Circuit Court that alleges Marathon violated the state's price-gouging law that was triggered by Gov. Steve Beshear's declaration of a state of emergency on April 26, following storms and flooding in Western Kentucky. The motion asks the court to require that Marathon lower its wholesale prices in all Kentucky markets to no more than the price charged on April 25. The injunction would also apply to Marathon's subsidiary Speedway LLC.

As evidence, the motion used the shift in wholesale prices in Louisville. According to the motion, the wholesale price for regular gasoline there was $3.25 per gallon on April 25 and jumped up to $3.48 on April 28, and remained as high as $3.46 on May 9. The price has since lowered. Kentucky's price-gouging law only permits suppliers to raise prices when they have seen an increase in costs.

"I issued the price-gouging executive order precisely so our Kentucky families will be protected from attempts to profit from disaster," said Beshear in a news release. "I fully support the Attorney General's ongoing efforts to investigate instances of price gouging and bring offenders to justice."

Marathon responded by denying any wrongdoing and accusing Conway of political grandstanding. "Once again Marathon Petroleum Company finds itself singled out for litigation by a Kentucky attorney general on the eve of a primary election in which the attorney general is a candidate," said company spokeswoman Angelia Graves. "The original litigation accusing our company of violating Kentucky's emergency pricing law was filed in 2007 and the Kentucky attorney general's office has yet to articulate a standard by which we can reasonably judge the conduct of our business in Kentucky."

A scheduled court hearing was postponed until 9 a.m. May 19.