Attorney General Jack Conway’s Monthly Column

Yesterday, in the wake of losing his case against Marathon, Jack Conway released his monthly column.

Dig in:

Spring has proved to be a tough time for many Kentucky families. Severe weather and flooding have damaged homes across the Commonwealth and left many struggling to make repairs.

During these difficult days, families have also struggled to fill their gas tanks. I would like to thank the many Kentuckians who contacted my office in the wake of the recent storms to report drastic spikes in gas prices. Some communities saw prices jump 30 cents; topping $4 a gallon.

On May 13, I filed a temporary injunction alleging that Marathon Petroleum drastically increased its prices during a time of emergency, in violation of Kentucky’s price-gouging statutes. Our request asked the court to require Marathon to lower its wholesale prices to levels before April 26 when Gov. Beshear declared a state of emergency.

I pursued this case to protect the best interests of consumers across the Commonwealth, who are hurting right now and many parts of the state saw an immediate decrease in prices at the pump. Although our request for a temporary injunction was denied, the judge was clear that his ruling did not affect the ongoing and underlying price-gouging case against Marathon.

Read the rest after the jump…

I believe Marathon has engaged in price gouging and I plan to continue to move forward and aggressively pursue this case. The price-gouging law only permits suppliers to increase prices if there has been an increase in costs to the supplier. Marathon’s cost increases in this case did not justify the price increases at the pumps. I am also pleased to see that gas prices have gone down a little bit since we sought the injunction.

In 2009, in the wake of Hurricane Ike and subsequent windstorm in Kentucky, I made it clear that price gouging would not be tolerated in Kentucky. You may recall I reached settlements totaling more than $107,000 with eight retail gas stations that gouged consumers at the pumps during a time of emergency.

At my request, Gov. Beshear on May 25 extended Kentucky’s statewide price-gouging protection laws for an additional 30 days. I appreciate Gov. Beshear’s quick response and attention to this matter.

I also want consumers to know that I remain concerned that Marathon’s dominance of the wholesale gasoline market in Kentucky allows a distortion of our gas prices. In certain areas of the Commonwealth, it actually has a 100 percent monopoly on wholesale supply. In the long term, we must address this problem, and I turned over evidence we have developed to the U.S. Department of Justice’s recently formed gas task force that is charged with investigating illegal activity in the oil and gas markets.

As Attorney General, I will continue to do everything within my power to protect Kentucky consumers and to ensure that businesses that engage in unfair or unscrupulous activities are held accountable.

Jack Conway
Attorney General