Five of the retail stations were owned by Pilot Travel Centers LLC. The stores are located in Corbin, Williamsburg, Middlesboro, Franklin and Lone Oak. Pilot has agreed to pay $100,000 as part of the settlement. [image-nocss] Krunal LLC, which owns the T-Mart in Franklin in Simpson County, has agreed to pay $5,000, and Mike and David #2 Inc., which owns the T-Mart in Wingo, will pay $2,500. The fines are not an admission of wrongdoing or guilt. All of the stations have denied any wrongdoing.
Conway said that on Sept. 12, 2008, even before Ike made landfall, the his office and the governor's office received dozens of calls from consumers around the state reporting that gasoline prices had spiked up to $4.59 at some retail stations. He said they later saw prices increase as high as $4.99 in some locations. There were also widespread news reports that stations in the southeastern United States could possibly run out of gasoline if Ike damaged refineries along the Gulf Coast. He said, "At one point, the Office of the [AG] received so many consumer calls that phone service was temporality disrupted."
He added, "Because of our proactive efforts, retailers were put on notice that price gouging would not be tolerated and would be investigated. In most cases, we saw gas prices stabilize within 24 to 48 hours."
Beshear, at the request of Conway, declared a state of emergency on September 12 and triggered the provision under Kentucky statute that gives the AG the authority to investigate claims of price gouging. Conway set up a gasoline price complaints hotline and email address were set up to process consumer complaints. In the week following the disaster declaration, the AG's office received nearly 2,000 phone calls and emails from consumers, he said.
"I encouraged consumers to be our eyes and ears throughout the Commonwealth to help us crack down on any retailers who might be trying to take advantage of Kentucky consumers," Conway said. "They responded by providing us with valuable evidence that included digital photos and receipts."
Investigators reviewed all of the complaints and sent subpoenas to retailers who had multiple complaints. Those subpoenas included requests for wholesale and retail price data. Based on the information obtained from the subpoenas, investigators determined that some retailers had a profit margin during the one-week period after the disaster declaration of up to $1 per gallon.
The AG's office said it will reimburse itself for investigative costs; however, the majority of the settlement money will be deposited into the General Fund with the hope that the General Assembly will appropriate the restitution for a transportation related purpose to benefit the drivers in the affected communities, Conway said.
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