Official confirms post-Katrina gas price gouging

ANNAPOLIS (AP) — Attorney General J. Joseph Curran Jr. says Maryland’s gas stations earned record profits in the days after Hurricane Katrina, confirming suspicions of price gouging in the aftermath of the August 2005 storm.

Mr. Curran, a Democrat, told leading state lawmakers that station owners and suppliers increased prices well above necessary. He found no violation of Maryland law but recommended the state adopt measures to prevent price gouging in future crises.

“Many stations enjoyed dramatic increases in per-gallon profit margins,” Mr. Curran told Senate President Thomas V. Mike Miller Jr., Calvert and Prince George’s Democrat, and House Speaker Michael E. Busch, Anne Arundel Democrat.

Profit margins were higher in early September than before the hurricane struck on Aug. 29, Mr. Curran said.

According to AAA statistics, average prices increased to $3.26 a gallon for regular unleaded gasoline in Maryland on Sept. 2, 53 cents more than the previous day.

The average fuel price in the District on Sept. 7 was a record $3.38 a gallon, according to AAA.

Gas station owners defended their industry, saying they are at the mercy of suppliers.

“Some of our guys only have a 3-cent-per-gallon profit,” Marta Gates, director of operations for the Washington, Maryland, Delaware Service Station and Automotive Repair Association, said Friday.

The association represents about 500 service stations in Maryland.

In 2004, Virginia passed the Post-Disaster Anti-Price Gouging Act, which prohibits suppliers or sellers of goods and services from charging unconscionable prices in the aftermath of disasters in the state during a 30-day period following a declared state of emergency. Virginia is one of about 25 states to have such a law.

A Centreville gasoline station that charged up to $5.89 per gallon for regular gas days after Katrina reached a tentative settlement this month with the state. As part of the agreement, the station must make available $3,000 to refund customers. A Falls Church station also settled a similar case. The state Attorney General’s Office is reportedly investigating other cases.

Under legislation pending before the Maryland General Assembly, petroleum suppliers, gas station owners and other retailers of essential goods would be restricted in how much they could increase prices during or 180 days after a declared state of emergency.

People who sell fuel, food, medical supplies, building materials and other key goods at prices more than 10 percent higher than rates in the two months before a declared emergency could face charges unless they could prove they were passing along price increases from suppliers.

If convicted, retailers would face up to a year in jail and a $1,000 fine.

The Senate Judicial Proceedings Committee approved the bill Friday. It could be debated on the Senate floor as soon as this week, said sponsor Sen. Leo E. Green, Prince George’s Democrat.

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