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May 16, 2011 9:55 AM

Gas Price-Gouging Hearing Postponed Until Thursday

A hearing scheduled for Monday to hear charges of gas price gouging filed by Kentucky Attorney General Jack Conway has been postponed until Thursday.

Conway filed charges last week under the state price-gouging law, accusing Marathon Petroleum Company of illegally raising prices during a state emergency declaration for flooding last month. Conway says prices rose as much as 30 cents overnight in some areas in late April.

Marathon also owns Speedway stations.

The hearing will now take place on Thursday at 9 a.m.

The motion alleges that Marathon violated Kentucky's price-gouging statute (KRS 367.372, et seq.), triggered when Gov. Steve Beshear declared a state of emergency on April 26 in the wake of flooding. Conway filed a temporary injunction in Franklin Circuit Court on Friday. If a judge agrees, Marathon would have to lower prices to pre-April 26 levels, about $3.25 per gallon.

When triggered, the price-gouging law only permits suppliers to increase prices due to an increase in costs to the supplier. Conway says he does not believe that cost increases in this case justify the price increases. The memorandum supporting the motion alleges that Marathon's increase of price was not supported by cost increase, but was linked to an increase in the commodity spot market price and New York Mercantile Exchange future prices.

In a statement, Marathon accused Conway of singling out the company in an act of political gamesmanship.

"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. 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."


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