• E-mail
• Print
• Comment
• Font Size
• Digg
• del.icio.us
• Discuss article

CORRECTION: Gas Stations Pay Fines Over Prices

Posted on: Friday, 7 October 2005, 15:00 CDT

By Michael D. Sorkin, St. Louis Post-Dispatch

Sep. 29--A story moved by Knight Ridder/Tribune Business News for Sep. 29 with the slug SL-GAS-STATIONS gave incorrect figures in the 14th graf for a statement made by Missouri Attorney General Jay Nixon. Nixon said some gas stations raised prices two to three times a day after Hurricane Katrina.

Please delete the former version and use the corrected one below.

Gas stations pay fines over prices

By Michael D. Sorkin

St. Louis Post-Dispatch

Sep. 29--Motorists here and across the country complained loudly after gasoline prices shot up to more than $3 per gallon after Hurricane Katrina.

On Wednesday, Missouri Attorney General Jay Nixon sued one gas station and announced that nine others had agreed to pay a total of $6,750 to comply with a relatively unknown state law outlawing price-gouging.

In Illinois, Attorney General Lisa Madigan is continuing to monitor gas prices after she received hundreds of complaints.

Gas stations normally average 3 cents to 12 cents per gallon in profit, Nixon said. But after Katrina, he said, gas soared to as high as $3.49 per gallon at Missouri stations. Some stations saw profits increase by 400 percent.

One station's profit even soared to 95 cents per gallon.

"Three dollars per gallon is absurd," Nixon said.

A trade organization representing gas stations and convenience stores fired back:

"The fact that the attorney general has accused such a small number of fuel retailers of price gouging out of the more than 3,000 gas stations and convenience stores in Missouri proves that this is not an industry-wide problem," said Ronald J. Leone, the executive director of the Missouri Petroleum Marketers and Convenience Store Association.

Leone added: "To expect fuel prices to remain stable and low during this extended crisis is completely unrealistic."

He advised station owners to complain to Nixon about his investigation. Many did.

On the other side, more than 350 motorists complained to Nixon's office after the hurricane. State investigators focused on 50 stations, primarily in southeastern Missouri, source of most of the complaints. Investigators issued civil subpoenas for records, and compared prices and profits for 10 days before Katrina and 10 days after.

When a station's profits after the hurricane looked abnormally high, investigators asked: Why are you making such high profits?

Almost always, investigators said, the stations had no answer, or said they were matching the prices of a nearby station.

Some stations raised prices two to three times in a day, Nixon said.

Investigators uncovered no gouging in the St. Louis and Kansas City areas, although Nixon said consumers there complained.

It may seem like gouging, Nixon said. "But it's really keen competition."

Nixon investigated price-gouging after 9/11, and he said that may have kept the practice from becoming more widespread this time.

Nixon gave each station a chance to settle, and nine did. They agreed to pay penalties ranging from $500 to $2,500 each. The money goes to local school districts.

The penalties are relatively small, Nixon acknowledged. But he said that's less important than the message his investigation will send.

The trade association maintains that most stations settled because they can't afford to take on the state, face bad press and pay for a court battle to clear their good names.

"Unfortunately, having to swallow your pride, bite your tongue and cut your losses are ugly but true facts of life and business," Leone said.

One station in Springfield, Express Lanes Inc., at 2959 North Grant, wouldn't settle. Nixon sued, alleging that the station had taken advantage of Katrina to increase profits by more than 400 percent. He is asking a judge in Green County Circuit Court to order appropriate penalties.

Nixon acted under a state price-gouging regulation that outlaws any sales practice that takes advantage of "extreme temporary conditions." The maximum penalty is $1,000 per violation.

Nixon said he plans to keep investigating gas prices through Oct. 15. "Pick up the phone and call us," he said to consumers.

The attorney general's phone number is 1-800-392-8222.

GAS PRICES

Samples of highest gas prices here

Wednesday

$2.99: Citgo St. Louis-Central -- Grand & Hickory

$2.99: Mobil Maryland Heights -- Dorsett & McKelvey

$2.99: QuikTrip Wentzville at Highway 70

$2.91: Casey's St. Charles -- Harry S Truman and Point West

$2.89: Moto Mart Columbia, Ill. -- 286 Southwoods and Rt. 3

Samples of lowest gas prices here Wednesday

$2.57: Costco Concord -- 4200 Rusty Rd (near I-55 and Lindbergh)

$2.57: Sam's Club St. Charles -- 2855 Veterans Memorial Parkway

$2.74: Shell Manchester -- Highway 141 and Manchester

$2.77: Phillips 66 Florissant -- 8231 Lindbergh and Loyola

Source: Customer ratings on stlouisgasprices.com as of Wednesday afternoon

-----

To see more of the St. Louis Post-Dispatch, or to subscribe to the newspaper, go to http://www.stltoday.com.

Copyright (c) 2005, St. Louis Post-Dispatch

Distributed by Knight Ridder/Tribune Business News.

For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail reprints@krtinfo.com.

Source: St. Louis Post-Dispatch

More News in this Category