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Updated: 6:51 PM Jan 22, 2009
Two Franklin Gas Stations Named In Gas-Gouging Report
The state finally hands out its results after months of investigating price-gouging last summer.
Eight Kentucky gas stations were fined for alleged gouging and two of those are in Simpson County.
Posted: 6:40 PM Jan 22, 2009Reporter: Ryan Dearbone Email Address: ryan.dearbone@wbko.com |
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The state finally hands out its results after months of investigating price-gouging last summer.
Eight Kentucky gas stations were fined for alleged gouging and two of those are in Simpson County.
Kentucky Attorney General Jack Conway says over the last few months more than 2,000 e-mails, calls, and pictures led him to several gas stations who made high profits during the gas shortage caused by "Hurricane Ike."
"As we got through the info we received from the subpoenas, we focused on some stations that had an excessive profit margin. We had some that approached $1.00 a gallon. The normal profit margin on a gallon of gas is 12 cents," explains Conway.
Attorney General Conway says these 8 gas stations weren't just spiking prices short-term.
"Not only did we see them for a day or two, around the concern around the potential shortage from hurricane Ike, we saw it for 6 days or more," Conway says.
Two of the gas stations Conway's investigation led to were the Pilot Travel Center and T-Mart in Franklin.
At one point, the T-Mart's gas was higher than anywhere else in the city topping out at $4.69.
Franklin mayor Jim Brown says he's surprised two of his city's gas stations might have gouged customers.
"Its always concerns me when people get taken advantage of. But I do feel that our community is historically probably the lowest in the surrounding areas," says Brown.
The mayor says he will monitor prices in Franklin, but says there's not much else he can do.
"I don't know that we have the ability legally here to do anything other than monitor it," Brown notes.
One city left off of the "gouging report" is Bowling Green.
Although prices are higher than surrounding towns, Conway says so far he hasn't seen real evidence of gouging taking place.
"We have not seen systemic overcharging to the degree we saw it in North Central Kentucky during the summer season near the 4th of July", Conway says.
The Attorney General says his office is still investigating possible cases of price gouging throughout the state.
Pilot Travel Centers paid the state $100,000 as part of a settlement, while T-Mart's owner Krunal, LLC paid $5,000.
According to Conway, the fines are not an admission of guilt or wrongdoing by any of the stations.
The following is the entire press release issued by Travel Pilot Centers, LLC, on January 22nd, 2009:
"In total, Pilot's gasoline and diesel prices were reviewed in 12 states on the cusp of the significant product outages and rapidly increasing wholesale fuel prices Pilot was charged while it supplied motor fuels to the affected areas in which it operates. Fortunately, Pilot was able to secure gasoline and diesel, and was able to continually sell the products while many fuel retailers, shuttered their businesses with product outages. Pilot cooperated fully with each state as they reviewed Pilot's fuel prices during the August to September 2008 time frame.
The review of Pilot's motor fuel prices resulted in outright releases from three states, seven states have indicated that there will likely be no further action pursuant to their review and two states, including Kentucky, have pursued monetary penalties and restitution. The dollar amount associated with the other state seeking penalties and restitution pales in comparison to the amount specified in today's annoucement by Governor Beshear.
Specifically, the Kentucky review encompassed seven of the 23 locations operated by Pilot. The seven locations are located in the southern region of the state. During the review period (August 1 through September 19, 2008), the seven locations received 476 loads of unleaded regular gasoline, primarily from supply points in Tennessee, and sold, on average, below Pilot's actual cost for 17 days of the 50 days reviewed. However, the review led Kentucky to further analysis of the five locations referenced in the release over the September 12 through September 15, 2008 period - the period of time where the Tennessee supply points were literally out of gasoline supply due to the inability for the supply pipelines to operate.
During the September 12 through 15 time period, Pilot never ran out of gasoline at the five locations because it diverted its fuel trucks from the normal Tennessee supply points to furl supply areas in Indianapolis and Evansville, IN and Louisville and Lexington, KY. Since the normal supply points in Tennessee skyrocketed to $4.95 per gallon at the wholesale supply points, Pilot's pricing area based its retail pricing on the premise that the Tennessee fuel supply was being utilized as opposed to the alternative supply in order to stay open for the citizens of Kentucky,
The Kentucky announcement purports that the Pilot retail prices were at or above $4.59 per gallon but two of the Pilot locations never exceeded $4.29 per gallon for regular unleaded.
Pilot is proud of its reputation as a fuel retailer and employer in the state of Kentucky. It has served the Kentucky gasoline market for over 40 years. It is regretful that the state of Kentucky did not take a more holistic view of the circumstances. However, Pilot worked with the state to quickly settle the review findings and looks forward to continued service to the residents and travelers of Kentucky."
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