MFA exec addresses gas price increases

COLUMBIA, Mo. -- Confronted with customer outrage, a top executive of MFA Oil Co. apologized for "irresponsible" gasoline price increases at Break Time convenience stores across Missouri just hours after Tuesday's terror attacks.

"The whole tragedy is so sickening to the general public that anything that smacks of taking advantage is awful and it rightfully should be condemned," Jerry Taylor, senior vice president of Columbia-based MFA Oil, said in an interview Thursday.

Break Time prices for regular unleaded rose Tuesday from about $1.56 a gallon to $1.79 a gallon, but were reduced in most areas by Wednesday afternoon, Taylor said.

Meanwhile, the Missouri attorney general's office said it had delivered "a handful" of cease-and-desist orders to gas stations that boosted prices to more than $2.50 a gallon after the suicide plane crashes in New York, Washington D.C. and Pennsylvania.

Attorney General Jay Nixon has authorized following up the orders by filing lawsuits as early as next week against an unspecified number of gas stations, accusing them of price gouging, said spokesman Chuck Hatfield.

Hatfield would not identify any companies targeted for lawsuits. But he said MFA's price increases -- about 20 cents to 25 cents per gallon -- were far from the steepest investigators had found.

MFA Oil Co. operates about 80 Break Time stores, mostly in central and rural Missouri. The company, which Taylor said is owned by some 40,000 member farmers, grew from the former Missouri Farmers Association, a cooperative founded in 1929.

Taylor voiced a radio advertisement that began running Thursday on several stations, giving the company's explanation of why fuel prices rocketed and then declined.

In the 60-second ads, Taylor didn't apologize for the price increases, as he did in media interviews. Instead, Taylor blamed MFA Oil's price increases on "a lot of speculation in the oil industry of upcoming disruptions in supply."

Wholesale suppliers alerted MFA Oil shortly after the terror attacks that they were raising prices, and some suppliers limited how much fuel could be bought, Taylor told listeners.

Additionally, he said, "huge" customer demand "completely depleted" some supplies on hand and MFA had to pay higher prices to refill its storage tanks.

"Our decision to raise prices on Tuesday was based directly on price increases we were receiving from our suppliers," he said. "As our costs almost immediately came back down, we immediately reacted to that."

Taylor told the AP he takes responsibility for the decision to raise prices. He said the step was wrong during a national crisis, "even if it meant we would have to take a loss."

"What we totally were irresponsible about was understanding the general public feeling, what the mood of the public was. They didn't like it and we apologize for it," he said.

He said scores of angry callers complained to MFA Oil's main office, while Break Time store personnel also got an earful about the higher-priced gasoline.

Esther Thorson, associate dean of the University of Missouri School of Journalism and a teacher of advertising courses, said MFA Oil took the right public relations step in "trying to explain itself."

But MFA Oil must also make sure its message matches the reality experienced by customers, she said. "If it does, they have a way better chance of being seen as credible."

Break Time customers interviewed at gas pumps Thursday scoffed at Taylor's explanation. But some said Break Time shouldn't be singled out for criticism, because other stations also raised prices.

"Any tactic like that in a time of crisis is price gouging, and it is immoral," said Monte Nevins, 55, of Columbia.

Felicia Mitchell, 32, of Columbia, watched her pump carefully because she planned to spend just $10 on gas.

"I don't know why they didn't just leave the prices alone. It just made the world a little worse on a rotten day," she said. "The world is already in turmoil, and they add to the turmoil?"

Nevins and Mitchell acknowledged that they were patronizing Break Time on Thursday because its prices -- $1.53 per gallon for unleaded regular in downtown Columbia -- were competitive.

Mike Right, spokesman for AAA Missouri, said MFA Oil's explanation was plausible if it was confronted with a "legitmate wholesale price increase."

"But everybody is concerned about someone taking advantage of the situation, whether it's 2 cents or $2 a gallon," Right said.

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On The Net:

MFA Oil Co.: http://www.mfaoil.com