WAVE 3 TV Louisville, KY | Kentucky AG questioning local gas retailers, wholesalers about pricing

Kentucky AG questioning local gas retailers, wholesalers about pricing

By Connie Leonard - bio | email

LOUISVILLE (WAVE) - Kentucky Attorney General Jack Conway and Congressman John Yarmuth are getting involved in finding out why gas retailers and wholesalers are charging local drivers so much more for gas than in other parts of the state. WAVE 3's Connie Leonard investigates.

One day after the governor called for answers, Conway promised his questionnaires will begin hitting gas dealers and wholesalers right away, and if necessary, subpoenas will follow under the state's consumer protection act. 

"Naturally we're suspicious," Conway said Thursday.

Conway says that suspicion comes as his own gas pricing experts couldn't explain 30-cent gas hikes for drivers in Jefferson County versus the rest of the state - and reformulated gas can't be the reason since northern Kentucky residents are paying 20 cents less than drivers in Louisville for RFG. 

Conway says he plans to question gas retailers and wholesalers about their practices in Louisville. "If we find collusion, if we find a violation of the Kentucky Consumer Protection Act, if we're suspicious of any of that activity, we're immediately going to submit subpoenas and civil investigative demands." 

Conway added that collusion wouldn't likely be one gas station hiking its price when a station across town does. He believes most retailers follow a standard formula in setting prices reflective of their wholesalers.

Ironically, at the exact same moment Conway was asked if there was a particular wholesaler he would be looking at, a Marathon Petroleum tanker pulled up behind him. "At this stage of the game, I don't want to begin naming companies," Conway said. 

The Attorney General's Office has an ongoing $90 million dollar lawsuit against Marathon Petroleum, alleging  price gouging in the wake of Hurricanes Katrina and Rita, and his expert in that case will also look at the current price gap issue. 

Marathon Petroleum, which supplies many of the gas stations in the region has told us part of the cost difference for reformulated gas has to do with different blends for each city that uses reformulated gas.

Third District Congressman John Yarmuth says it may be time to look at that issue. "I think there is something like 30 different formulations of gas around the country, and several years ago, they did crack down on the number and that did have some impact on gas prices."

One gas retailer told us he welcomes the Attorney General's investigation because he believes many consumers blame the retailers for the problem. Meanwhile, Yarmuth is among several lawmakers asking President Bush to investigate a lack of regulation in us oil markets.