By RONNIE ELLIS
FRANKFORT — Eight gasoline retailers, including two in Whitley County, will pay the state more than $100,000 to settle charges they engaged in price gouging during Hurricane Ike last September.
Five of the stations are owned by Pilot Travel Centers LLC which is based in Knoxville and serves much of southeastern and southern Kentucky, including three stations located in Corbin, Williamsburg and Middles-boro. Two of the others are T-Mart stations, one in Franklin and the other in Wingo. The eighth station had not yet agreed to a settlement Thursday morning and was not identified by Attorney General Jack Conway whose office conducted the investigation.
Conway began the investigation after Gov. Steve Beshear declared a state of emergency on Sept. 12 as Hurricane Ike buffeted the Gulf Coast and eventually hit parts of Kentucky with damaging, straight-line winds on Sept. 14.
Pilot will pay the state $100,000 in the agreed settlement while the Franklin T-Mart station will pay $5,000 and the Wingo station $2,500.
Conway said the companies “do not admit wrong doing,” but he said the stations engaged in “price gouging,” charging “grossly in excess pricing that existed for six days or more.”
Pilot Travel Centers General Counsel Kristin Seabrook issued a lengthy statement which said Pilot diverted supply trucks to fuel supply locations in Evansville, Ind., Louisville and Lexington when supplies were disrupted at its usual Tennessee locations causing wholesale prices in Tennessee to soar to $4.95 a gallon. The statement said the company’s pricing department failed to account for the difference between the Tennessee wholesale prices and those at Indiana and Kentucky fuel supply points in establishing retail prices.
“Pilot worked with the state to quickly settle the review findings and looks forward to continued service to the residents and travelers in southern Kentucky,” the statement concluded.
Calls to a number listed for the Pilot station in Williamsburg were not answered.
Hurricanes disrupted pipe line service from the gulf to distribution centers from which wholesalers serving Kentucky retail outlets get fuel. But even before the disruption occurred, Kentucky consumers flooded the phone lines of Beshear’s and Conway’s offices on Friday, Sept. 12, complaining about sudden price hikes. At around noon that day, Beshear issued his declaration of emergency under which Kentucky’s price gouging law goes into effect.
By that afternoon, Conway said, his office fielded “thousands of calls” about gas prices spiking dramatically. Culling through 2,000 complaints, the investigators eventually issued 19 subpoenas and after reviewing company cost and pricing data charged the eight stations with price gouging.
An investigation of wholesale prices in Louisville continues, Conway said.
Conway said all but about $30,000 to pay for expenses of the investigation will go to the state’s general fund. He said he thought the settlement amounts were reasonable penalties for the state to collect and sufficient to deter gasoline companies from price gouging.
“If you’re going to gouge, if you are going to engage in this behavior, there is indeed a price to be paid,” Conway said is the message the penalties deliver.
