ARTICLE TOOLS

E-mail story

Comments

Printer friendly version

iPod friendly version

Share This

Text Size: A A A A

Eastern Tennessee tops gouge complaints

By: Adam Crisp
(Contact)

Included in this article

Jeff Lenard

East Tennessee was a hotbed for gas-gouging complaints during September’s gas shortage.

More than 3,000 complaints of gouging across the state came into the Governor’s Office of Consumer Affairs, most from Knoxville and Chattanooga, officials said.

The Tennessee Attorney General’s Office has whittled those calls down to about 100 potentially valid complaints, said Jeff Hill, the attorney general’s senior counsel. The office is investigating those complaints as part of a criminal investigation.

“We have sent out about 100 requests for information,” Mr. Hill said. “Some have not replied, and we’ll be following up with those.”

In mid-September, at the peak of gas shortages in Georgia and Tennessee, Georgia had the highest average price in the Southeast at $4.16 a gallon.

According to AAA, the average price for regular unleaded in Chattanooga around that time was $3.97, while the average price in Knoxville was $4.65 for a gallon of regular unleaded.

The attorney general wants to know what sellers were paying for gas before the shortage and what their wholesale price was when the complaint calls were placed. It will be up the attorney general to decide what was a reasonable profit margin and the cases may eventually land in front of a judge, Mr. Hill said.

“Gas stations had to raise prices for various reasons. Some are legitimate and others aren’t,” he said.

Georgia’s attorney general has issued about 150 subpoenas for wholesale gas receipts, state officials said. Complaints about possibly inflated prices have been received from every region of both states, officials said. Unlike Tennessee, however, Peach State complaints weren’t concentrated in one area, said Shawn Conroy, a spokesman for the Georgia Governor’s Office of Consumer Affairs.

“We haven’t seen a surge of complaints in any one area,” he said. “Anywhere you have a number of stations along an interstate highway, you will have issues.”

Tennessee officials have declined to release the names of the reported gas stations, citing the ongoing criminal investigation.

If the attorney general finds that there was price gouging, the offending businesses could face fines up to $1,000 per violation under the Consumer Protection Act. The businesses also may have to pay restitution.

But it’s not clear what the act means when it says “per violation.”

“It can be calculated in different ways,” Mr. Hill said. “It could be a number of things. It could be per sale, for example.”

In Tennessee, gas stations had until Oct. 1 to reply to requests for information, said Larry Herrington with the attorney general’s office. Subpoenas demanding the information will follow, he said.

Of the 3,000 calls handled by the Tennessee Consumer Affairs Office, some callers reported gas selling for as much as $9 a gallon. Those claims have not yet been substantiated, Mr. Hill said.

There are no words to defend gas stations that were charging several dollars more than their wholesale price, says Jeff Lenard, spokesman for the National Association of Convenience Stores, but until all the facts are known, it’s not fair to say every business that charged more than the average was price gouging.

“Businesswise, I don’t see why anyone would charge way above their wholesale price for fuel,” Mr. Lenard said. “Most retailers said they will do whatever it takes to get fuel and to keep the media off their lot. ... Consumers will remember who overcharged them.”

Mr. Lenard said, based on other widespread gas-gouging complaints, most accused gas sellers simply pay the fine rather than face a criminal action and the impending negative publicity.

Staff writer Mike O’Neal contributed to this story.

Comments