Attorney general mulling gouging probe
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Mark Albrecht of Burton stood dumbfounded, staring down Boundary Street as he put gasoline in the tank of his Mercury Sable at the Hess Mart in Beaufort.
The focus of his bewilderment — the $4.68 being charged for a gallon of unleaded gasoline at a nearby gas station.
"I don't get it," he said, shaking his head. "I don't get how gas can be 40 cents cheaper a few blocks down the street. They can charge what they want because they know we can't live without it. You'd hope that they would be responsible about the impact this has on people's lives but looking back on this weekend, you'd be hard-pressed to argue that anyone acted responsibly."
Albrecht is certainly not alone in his frustration over skyrocketing gas prices.
Since Friday, the S.C. Attorney General's Office has received more than 500 calls and about 1,000 e-mails from residents claiming price- gouging at state gas stations, said Mark Plowden, spokesman for Attorney General Henry McMaster.
McMaster invoked the state's anti-price gouging law Friday afternoon as Hurricane Ike threatened oil platforms in the Gulf of Mexico — where a quarter of the nation's oil is produced — and motorists nationwide raced to the pumps.
The law, passed after fuel shortages at gas pumps in the wake of hurricanes Katrina and Rita, makes it illegal to sell gas at an "unconscionable price" not attributable to additional costs or market fluctuations during a declared state of emergency by the governor or the president. The statute also gives the attorney general the ability to identify an "abnormal disruption" of the market in another part of the country that would affect the price of a commodity in South Carolina. McMaster also made that declaration Friday afternoon.
Those found guilty of cheating consumers can be fined up to $5,000 per violation and face criminal penalties of $1,000 and up to 30 days in jail — in addition to a class-action lawsuit that the gas station could face on behalf of affected consumers.
"Any profit that gas stations might make by jacking up their prices certainly pales in comparison to a class-action lawsuit or any criminal penalties, fines and possible jail time that they could face under state statute," Plowden said. "Needless to say, it's not in their best interest to risk it."
While the statute gives the state the ability to prosecute price gougers, it leaves the definition of price gouging open to interpretation. The law states only that vendors must not charge "an unconscionable price," but makes no mention of what that price might be.
In at least two other states, law enforcement has begun questioning gas stations and their parent companies over the most recent spike in gasoline prices.
In Florida, Attorney General Bill McCollum issued subpoenas to four companies Monday, asking them to provide documentation to justify the high prices demanded of customers in the Sunshine State.
North Carolina Attorney General Roy Cooper announced Monday that he, too, would seek subpoenas.
Plowden said state law enforcement and prosecutors are investigating the complaints received.
"It's a vicious cycle of fear," he said. "If we have someone out there exploiting that fear by charging artificially inflating prices, that can cause a run on gas stations, and that will diminish the supply and ultimately only serves to create more fear. With the statute that we have, the state provided us with a remedy, and we will get through this."
South Carolina's petroleum industry says state gas stations should be prepared to face thorough scrutiny over its prices.
"As a wholesaler or a retailer, you've got to be cognizant of the fact that state, federal, and local authorities may be calling," said Michael Fields, executive director of the S.C. Petroleum Marketers Association. "They've certainly got to make sure that they're keeping good records and can justify what they've been charging the public."
Problems with supply, Fields said, may be to blame for discrepancies that motorists are seeing at gas stations in close physical proximity.
Hurricane Ike shuttered petroleum refineries and damaged — and in some cases, destroyed — oil platforms in the Gulf, severely hampering the country's oil supply.
A gas station may also look to protect their inventory by raising prices to ensure that they have product to sell as petroleum refineries along the coast come back on line, Fields said.
"That's a legitimate business decision," he said. "Does a business want to have some (protection) or be completely dry? With the price gouging laws kicking in, those business would certainly need to be careful and cautious. In this politically charged atmosphere, they would certainly be taking a risk."
Fields said the pipeline that supplies the Upstate and Midland parts of South Carolina is once again functioning, though at "a much lower level," and petroleum products have once again been arriving at the ports of Charleston and Savannah, where the Beaufort-area gets all of its fuel.
In the interim, Gov. Mark Sanford encouraged South Carolinians to "use a common-sense approach to their fuel purchases," according to a release Monday from his office.
"While we're taking what steps we can at the state level, I can't emphasize enough that the key to getting through this short-term disruption lies in our collective hands as South Carolinians," he said, in the statement. "As we said last week, that means common-sense conservation and patience, and it means avoiding the temptation to fill up everything we have."
Motorists can expect to continue paying more at the pump in the coming days, according to AAA Carolinas, which predicted Monday that it would likely take seven to 10 days for the supply levels to where they were before Ike.