Arkansas AG Subpoenas Gas Retailers for Ike-Related Price Spikes

September 18, 2008

Arkansas Attorney General Dustin McDaniel has begun issuing subpoenas over spikes in fuel prices at 52 gas stations around the state as Hurricane Ike approached the Texas coast.

McDaniel said more than 1,450 people phoned his office with complaints and more than 2,400 people either e-mailed or sent text messages about suddenly high gas prices. McDaniel’s office said 10 subpoenas were sent to operators covering a total of 52 locations around the state.

The companies will have 20 days to respond to the subpoenas.

“In the event I find sufficient evidence of illegal price gouging, I will be making demand upon those entities to make restitution and pay penalties for the violations,” McDaniel said. “If they refuse, they will be sued.”

Some retailers bumped gasoline prices to $4.50 per gallon or more as Ike took aim on the Gulf Coast.

McDaniel’s office released a list of the 10 business owners, but not the specific addresses of the 52 gas stations being targeted.

He said the subpoenas seek information on what prices were leading up to the hurricane, how much the businesses paid for gas, and who authorized the price increases. Fuel companies commonly own a number of gas stations.

McDaniel said the highest price that his office logged in the state was $4.64 a gallon at a station in Osceola. He said that some of the price increases could lead to action under the state’s Deceptive Practices Act rather than the price gouging law.

Gov. Mike Beebe triggered action under the state’s price gouging law when he declared a state of emergency in response to gas-supply disruptions from the hurricane that struck the Texas coast. State law prohibits businesses from raising their costs by more than 10 percent in an emergency.

“Gouging is a term of art but there is no question in my mind there were some very unfair pricing practices. There were gas lines forming and people panicking because of people taking advantage of a circumstance that, mercifully, wasn’t as bad as it could have been,” McDaniel said.

McDaniel said at least two subpoenas were issued Monday for gas stations in the Jonesboro area. McDaniel, who is from Jonesboro, said he had taken pictures with his own mobile phone of signs there showing high gas prices.

Kum & Go L.C., which owns northeast and north Arkansas gas stations being targeted by McDaniel’s subpoenas, said it was reviewing the attorney general’s request for information.

“Kum & Go has been in business in the state of Arkansas for over 20 years so we are happy to assist the Arkansas Attorney General in understanding what caused the abrupt, unprecedented price increase late last week,” said Meggan Kring, the company’s director of communications.

McDaniel said the request for consumers to submit pictures with evidence of price gouging was a success and he described the effort as essentially deputizing thousands of Arkansans.

His office was still reviewing complaints it received over the weekend, and McDaniel said he did not know if he would issue more subpoenas.

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