Missouri AG Takes Action Against Gougers

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Missouri AG Takes Action Against Gougers

JEFFERSON CITY, Mo. -- Attorney General Jay Nixon said Wednesday he has taken legal action against 10 gas stations in southern Missouri over high prices in the aftermath of Hurricane Katrina, according to the Associated Press.

Nixon's office investigated how much gas stations paid for gas in a 20-day window around Hurricane Katrina, compared to what they charged customers, to determine whether prices were outside the law. He said he was taking action against stations in Butler, Greene, Jasper, New Madrid, Pemiscot, Ripley and Wayne counties, the AP reported.

Nixon told the AP he sued Express Lanes Inc. in Springfield, claiming its profit margin on gas increased more than 400 percent after the hurricane hit the Gulf Coast. He said nine other stations reached court agreements to pay a total of $6,750 into local school funds and to abide by state consumer protection laws. Nixon said the fines should wipe out those stations' unreasonable profits.

"When retailers take advantage of a situation like these natural disasters and their actions prevent consumers from making rational buying decisions, it is appropriate for the attorney general to act," Nixon said. "This is very much like the situation we saw right after Sept. 11."

About 50 Missouri gas stations settled with Nixon's office after a similar investigation into alleged price gouging after the Sept. 11, 2001, terrorist attacks, according to the AP.

The Missouri Petroleum Marketers and Convenience Store Association, which represents most gas stations in the state, said Wednesday that it has seen no evidence of price gouging in Missouri, and that higher prices resulted from near record-high crude oil prices and refinery disruptions.

"Unfortunately, [Nixon] does not understand the complexities of the global crude oil market and the pricing and selling of fuel at retail," executive director Ron Leone said in a statement. "To expect fuel prices to remain stable and low during this extended crisis is completely unrealistic."

According to the news report, Leone said some stations settled with Nixon's office because they can't afford to fight the matter in court. He also said that Nixon taking action against just 10 stations out of more than 3,000 in the state shows the problem is not widespread.

Leone said retailers can control only about 2 to 7 percent of the cost of gasoline, with most of the price determined by crude oil prices, refining costs and taxes. Nixon said he hoped his investigation helped keep prices in check, and agreed many outside factors play a role in gas prices.

The Petroleum Marketers Association contended that Nixon's examination of increased profit margins during a short period of time was not a fair way to check the industry, and that Nixon should have looked at retail fuel profits over a month or a year to see a clear trend.

Nixon told the AP that his office received about 350 complaints during its investigation. He also said he will continue investigating until Oct. 15 to see if any stations took advantage of Hurricane Rita to raise their gas prices to unreasonable levels.

Earlier this week, CSNews Online reported that New Jersey announced it had sued three oil companies and several gas stations for allegedly gouging drivers during Hurricane Katrina. The lawsuits accused Hess, Motiva Shell and Sunoco with artificially inflating gas prices and with increasing prices more than the once-a-day legal limit. The civil action was believed to be the first in the country in response to recent rising gasoline prices.