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AG's office probing state's wide disparity in gasoline prices
(Daily News, The (Bowling Green, KY) (KRT) Via Acquire Media NewsEdge) Sep. 13--The Kentucky Attorney General's office has sent out subpoenas as part of an investigation into widely varying gas prices throughout the commonwealth.
The investigation began after complaints were being made that gasoline in Louisville was 30 cents per gallon more than in other areas of the state, said Allison Gardner Martin, spokeswoman for the attorney general's office.
The subpoenas were issued Aug. 22 and were sent to refiners and suppliers with questions about the wholesale cost of fuel, she said. Those receiving the subpoenas had 45 days to respond.
The original investigation into gas prices was started about two years ago, she said.
"What we discovered was that it wasn't an issue at the retail level, but it was an issue at the wholesale level," Martin said.
The wholesale cost of a gallon of gasoline was higher in some areas of the state compared to others, and those higher prices were being passed along to the consumer, she said. The scope of the investigation was then expanded to look at the production of petroleum.
The investigation has led to cooperating with the U.S. Federal Trade Commission and the U.S. Department of Justice on an investigation of the merger of Ashland Oil and Marathon, Martin said.
"We've asked the FTC to review the merger to determine if it's created an illegal petroleum market at the wholesale level," Martin said.
The two companies were the top gas suppliers for many cities in Kentucky, including Bowling Green, she said; the cities served by those companies have traditionally seen higher gas prices than others.
According to the Elizabethtown News Enterprise, three candidates for Elizabethtown city council submitted a letter Tuesday to the Attorney General's office, asking for help in finding out why fuel often costs more there than in surrounding communities.
The supply situation in Kentucky appears to have led to pump prices increasing in the commonwealth even at times when the price of oil per barrel was decreasing, she said.
Gas prices in Bowling Green skyrocketed to nearly $4 per gallon Friday morning over fears that Hurricane Ike would disrupt the operation of oil refineries in the Gulf Coast.
Any charges resulting from the Attorney General's investigation would be considered violations of the Consumer Protection Act, she said, and not price gouging.
Price gouging can only be prosecuted after the governor declares a state of emergency. Gov. Steve Beshear signed such an order on Friday, saying gas stations started raising fuel prices overnight before Hurricane Ike made landfall.
The last time a state of emergency was declared that allowed price gouging charges was in the aftermath of hurricanes Katrina and Rita in 2005. Those storms caused massive flooding in Kentucky, Martin said, and brought price gouging charges against some Bowling Green gas stations.
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Copyright (c) 2008, The Daily News, Bowling Green, Ky.
Distributed by McClatchy-Tribune Information Services.
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