Rising gas prices get AG attention

Published 5:00 am Friday, August 29, 2008

Even as Tropical Storm Gustav crouches in the Gulf of Mexico,gas prices have skyrocketed in Brookhaven – with some rising asmuch as 30 cents a gallon at some stations.

Prices on Brookway Boulevard, which had been hovering justbetween $3.35 and $3.40 through the early part of the week shot upinto the $3.65 to $3.70 range Thursday.

Wednesday night and Thursday morning saw lines forming at gasstations that had not yet raised prices. For the brief time thatthe Wal-Mart service station still hung at $3.34, traffic filledthe parking lot.

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Meanwhile, at other gas stations around town, people simplyaccepted their fate in order to fill their tanks.

“I have a Shell card,” said Summit’s Shelby Williams as shefilled up at Cracker Barrel on Highway 51 South. “I was coming backfrom Jackson and needed gas, and I hate spending this kind ofmoney, but I have a Shell card. I’ll be paying for it forever, I’msure.”

Meanwhile, members of the House of Representatives are urgingGov. Haley Barbour and State Attorney General Jim Hood to bevigilant about rising gasoline prices.

“Under the profits currently being enjoyed by the oil companies,it is certainly egregious behavior for anyone to raise prices totake advantage of a pending disaster,” said Dist. 91 Rep. BobEvans.

Barbour declared Mississippi as being in a state of emergencyThursday around 1 p.m. Some officials believe gas station ownerscould have been pumping up the prices, knowing the rise would befrozen once the disaster declaration was announced.

Mississippi’s price-gouging statute only goes into effect when adisaster declaration has been issued for a particular region of thestate by the governor or appropriate agency under his direction. Bylaw, merchants cannot increase their profits under a state ofemergency.

Local gas station owners and managers, though, say the increasein gas costs has been a result of several factors, includingpreviously extremely competitive prices on Brookway Boulevard.

“People in Brookhaven don’t know how good they’ve had it,” saidNeil Bozeman, owner of Bozeman Chevron on Cowart Lane. “Whathappened is they’ve been in a gas war, and it was about as cheap asyou can find anywhere in the state. They were selling below costs,then they realized that with the evacuation coming out of NewOrleans, we don’t want to pump way over our normal volume at belowour cost and lose money. That’s why you saw such a swing.”

Ted Evans said his gas station on Highway 51 South is dealingwith supply and demand issues, and that during a time when suppliercosts are going up, gas stations have to raise their pricesaccordingly.

“It’s just supply and demand, because there are so many peopleusing it up so fast and you can’t keep up,” he said.

And Mike Becker, owner of the Cracker Barrel stores, said partof the problem for some chains is the difference in gas quality aswell.

“Another thing people don’t realize is that some companies areputting ethanol in the gas which cuts the price, but Shell and someothers are still pumping a premium gas, which increases our costs alittle,” he said.

Becker, too, pointed at the gas wars on the boulevard, sayingthey affected prices all over town.

“The actual market price was going up, but everything isdictated by competition,” he said. “Those guys on the Boulevard areout there fighting, and until they made a move, we couldn’t,because we’d be so far off base.”

Bozeman said that local gas stations had found themselves inquite a quandary after keeping prices down to the point where theywere.

“They got caught selling below cost,” he said. “If they’d havegot caught with those margins they’d have had to stick with thatthroughout the storm. And if they’d gone up to regular cost toprevent loss, it’d be price-gouging.”

Becker also voiced concerns that the price freeze could end uphurting gas stations locally, since the state of emergency is not afederal issue like it was during Katrina.

“I’ve only been through one state of emergency, and state bystate I don’t know how it works in a time like this,” he said. “Butthe manufacturer dictates what prices we’re going to have, andstate of emergency all prices are frozen. Katrina was federal, andthe refinery prices were frozen too. With this just beingMississippi, I don’t know.”

Attorney General Jim Hood said anyone caught actually spikingprices to make a profit of more than $500 – a felony offense – willbe dealt with harshly. A release from his office said Thursday thata “fleet of investigators” had been sent out to check prices inorder to determine if prices for fuel, generators, buildingsupplies and other necessities are being inflated after the stateof emergency was declared.

Bozeman said he’d already received a visit from the AttorneyGeneral’s office a few days ago, as had many other local places tohis understanding. Public perception of gas prices is often notreality, he said.

“People don’t realize how much gas can fluctuate during theday,” he said. “The AG’s office came in and checked our invoices,and I know they went and checked a lot of stores to make sure whereeveryone was, that their prices were where they were supposed tobe.”

Bozeman said the inspector was checking not only the cost ofgas, but of other items used in emergencies such as batteries andice.

“They were just making note of what your prices were before thestorm, then they can come back after the storm and see if yourcosts have gone up,” he said.

A press release sent from the Mississippi House ofRepresentatives speculated on the reasons for the rising price.

“It appears that in order to circumvent the statute retailershave already begun raising prices in anticipation of a hurricanereaching the Gulf Coast region,” said the release, attributed toHouse Speaker Billy Mccoy, District 53 Rep. Bobby Moak andEvans.

Moak said the perceived price-gouging in the face of not onlyimpending disaster, but such a lackluster economy would undoubtedlybe a topic of conversation in next year’s legislative session.

“I am certain the Legislature will take action in January toprotect consumers to ensure this does not happen again,” said Moak.”That may mean legislation to stay price increases when a lowpressure system develops in the Atlantic during hurricaneseason.

“That may seem a bit extreme, but evidently that is the coursetaken by many retailers in the state, since they have not receivedprice increases from wholesalers or petroleum facilities providinggoods to them, yet have raised prices on a whim,” Moak said.