LOUISVILLE, Ky. (WHAS11) -- In the wake of a 30 cent overnight jump in Kentucky gasoline prices this week, Kentucky Attorney General Jack Conway filed a motion on Friday, alleging that Marathon Petroleum Company is guilty of price gouging.
Conway's motion in Franklin Circuit Court asks a judge to order wholesale prices to be rolled back to no more than what they were before Governor Steve Beshear declared a state of emergency on April 26, after flooding.
“I issued the price-gouging executive order precisely so our Kentucky families will be protected from attempts to profit from disaster," Beshear said in a statement, "I fully support the Attorney General’s ongoing efforts to investigate instances of price gouging and bring offenders to justice.”
The motion was filed in Kentucky's ongoing lawsuit against Marathon and its wholly owned subsidiary, Speedway LLC, for alleged price-gouging violations following Hurricanes Katrina and Rita in 2005.
Under the price gouging law, no retailer or supplier can raise prices during a time of emergency unless they can prove that they had to pay more.
"We feel like Marathon raised the price of the wholesale gasoline in Kentucky, not just here in Louisville, but across Kentucky, and that price was not related to the price that it was having to pay for supplies or refining goods," said Allison Gardner Martin, a spokeswoman for Conway.
Late Friday afternoon, Marathon fired back at Conway in an e-mailed statement.
"Once again Marathon Petroleum Company finds itself singled out for litigation by a Kentucky Attorney General on the eve of a primary election in which the Attorney General is a candidate," said Angelia Graves, Marathon's Director of Corporate Responsibility, "The original litigation accusing our company of violating Kentucky’s emergency pricing law was filed in 2007 and the Kentucky Attorney General’s office has yet to articulate a standard by which we can reasonably judge the conduct of our business in Kentucky. We believe these allegations are without merit and intend to vigorously defend this latest move by Attorney General Conway, just as we have defended similar charges in the past."
Louisville drivers have little doubt that they have been gouged.
"They normally raise (gas prices) during Derby," said John Stubblefield, "but after Derby, it jumped from $3.79 to $4.15? We're getting gouged bad."
"For the average hard working American citizen, this is absolutely ridiculous," said Shannon Kennedy, a mother of three.
Yet, oil industry insiders say consumers need to keep in mind that the wholesalers - like consumers - are also trying to ride the wave of fuel prices. And, right now they're in a perfect storm of market volatility, flooding - which has affected the supply chain, and
the calendar - because every May, Louisville starts the conversion to the summer blend of gasoline, RFG, reformulated gasoline.
"We have been able to prove that Marathon, we believe, is the sole provider of wholesale RFG in the Louisville market," Martin said.
Also Friday, the Kentucky Attorney General's office announced it has completed its three year investigation of the 1996 merger of Marathon Petroleum with Ashland Oil. Kentucky will forward the findings to the U.S. Justice Department. A federal task force is investigating gasoline pricing in the United States. An antitrust case involving Marathon's domination of the RFG market in Louisville could fundamentally affect the sale of wholesale gasoline in Louisville.
"We found during that investigation that the price of wholesale gasoline had gone up significantly in Louisville, not related to commodities and things like that, but we believe, based on anti-competition," Martin said.
