Nixon: Gas prices were 'questionable' at area pumps

An extensive review of gasoline pricing over the days following Hurricane Katrina revealed 10 retailers with questionable practices, Missouri Attorney General Jay Nixon said Wednesday.

Nine of those retailers paid a modest penalty and signed assurances of voluntary compliance to avoid lawsuits, Nixon said in a news conference at his Cape Girardeau regional office. The 10th, a Springfield retailer, is being sued, Nixon said.

Eight of the retailers were in Southeast Missouri, which is also where most of the 350 complaints about price gouging originated, Nixon said. "When retailers take advantage of a situation like this and deny customers the ability to make rational buying decisions, it is our responsibility to act," he said.

The Southeast Missouri stations named by Nixon include three in Poplar Bluff, one in Wappapello, one in Caruthersville, one in Doniphan, one in Piedmont and one in Matthews. Settlement payments in those cases ranged from $500 to $2,500 per retailer.

The payments totaled $6,750. An additional $4,000 in payments could be levied if the stations do not keep their promises, Nixon said. The money goes to the public school funds in the counties where the retailers do business.

The wholesale and retail price of gasoline shot higher, sometimes as much as 25 cents a day, during the week following Hurricane Katrina. The average price of gasoline throughout the state reached $3.06 per gallon, according to the AAA of Missouri.

Nixon said his office took action against the 10 stations with the most questionable pricing practices. The investigation included intensive reviews of every transaction at 50 stations, he said.

There are more than 3,000 gasoline retailers in Missouri.

Finding only 10 retailers to take action against out of those 3,000 retailers shows that stations did not take undue advantage of customers, said Ron Leone, executive director of the Missouri Petroleum Marketers and Convenience Store Association.

"When you have such a small percentage of alleged violators it clearly vindicates the industry," Leone said. "It shows that 99.9 percent are law abiding citizens who did everything in their power to ensure supply at a reasonable price."

Nixon won the settlements, Leone said, because retailers would rather pay a small fee than large legal bills to fight. "Unfortunately, having to occasionally swallow your pride, bite your tongue and cut your losses are ugly but true facts of life and business," Leone said.

The number of retailers who faced legal action is far below 48 who settled cases with Nixon after the Sept. 11, 2001 terrorist attacks. But the action "sends a message that we are continuing to watch," Nixon said.

The biggest settlement was with Travel Centers of America, which operates a restaurant and fuel store at Interstate 55 near Matthews in New Madrid County. The West Lake, Ohio, company paid $2,500 after investigations showed its profit per gallon increased to 95 cents in the week after Hurricane Katrina hit.

The pump price for regular gasoline rose to near $3.30 a gallon while the station's costs remained steady, a chart created by Nixon's office showed.

The company, which operates six travel centers in Missouri and 160 nationwide, decided a settlement was a better option than fighting a lawsuit, said Tom Liutkus, director of advertising and public relations.

"We felt different from the attorney general, but when they agreed to insert language into the voluntary compliance document that it was not an admission of wrongdoing, we felt the best thing was to get it behind us," Liutkus said.

The company disputes that its profit reached 95 cents a gallon, he said. The price paid for the gasoline being pumped by customers is just one part of the equation, Liutkus said.

The price the company set is also based on what competitors are charging and what it will cost to replace the gasoline in its tanks, he said.

"We will keep a sharper eye on things," Liutkus said. "We will make sure there isn't some quirky factor that makes it seem as though we are gouging."

The escalating cost of wholesale supplies was an important factor in determining which stations to act against, Nixon said.

rkeller@semissourian.com

335-6611, extension 126