- Associated Press - Tuesday, May 12, 2015

LOUISVILLE, Ky. (AP) - Kentucky Attorney General Jack Conway sued Marathon Petroleum Co. on Tuesday, claiming its control of the state’s wholesale gasoline market has “been allowed to run rampant” and results in higher prices at the pump.

The federal lawsuit alleges the company violated federal and state antitrust laws. The suit seeks to break Marathon’s monopolistic grip to allow greater competition in the market to benefit consumers, Conway said at a press conference.

The hardest-hit consumers, he said, have included people refueling vehicles in Louisville and northern Kentucky - two of the state’ts most densely populated areas.

“Marathon has been allowed to run rampant in Kentucky,” he said.

Marathon Petroleum Co. disputes the allegations “and will defend this judicial action vigorously in court,” said Chuck Rice, a spokesman for its Findlay, Ohio-based parent company, Marathon Petroleum Corp.

Rice declined further comment.

Conway is the front-runner in the Democratic primary for governor. The election is next week and he is likely to win.

Conway, in his second term as attorney general, said the suit wasn’t politically timed. He is preparing for a tough fall campaign against the winner of a four-candidate Republican primary.

“Yes, my name’s on the ballot … but if I see the consumers being treated unfairly at the pump, I think I have a duty to act as the attorney general of Kentucky. I’m not going to get any job in the future by failing to do my job right now,” he said.

The state’s current governor, Democrat Steve Beshear, cannot seek re-election due to term limits.

Conway used the lawsuit to bash the Federal Trade Commission, which he said has refused to investigate the origins of the company’s control of the wholesale gas market. Conway said he asked the FTC to investigate in 2008 and again in 2014.

“I’m sick and tired of beating my head against the wall in dealing with the federal government, so we’ll pursue it at the state level,” Conway said.

Conway has tried to show his willingness to stand up to the federal government. Republicans repeatedly try to link Kentucky Democrats to President Barack Obama, who is unpopular in the state. That attack line could become a key GOP strategy in trying to win the governorship in November.

FTC spokeswoman Betsy Lordan said Tuesday the federal agency had no comment. However, a 2004 report by FTC economists concluded it found no evidence of increased retail prices resulting from a joint corporate venture cited by Conway as the origin of the state’s anti-competitive wholesale market.

Conway said his office received numerous complaints from retailers in the past year, helping prompt the lawsuit.

The suit claims Marathon discourages competition in part by requiring independent retailers to sign supply agreements that eliminate wholesale competition.

Highlighting his case, Conway claimed that gas prices in Louisville averaged roughly 25 cents more per gallon than in St. Louis in the summer of 2014. At times, the disparity widened to 50 cents per gallon, he said. The attorney general’s office has lined up expert witnesses ready to testify that Marathon netted tens of millions in additional revenue to that disparity in pump prices, he said.

The suit also seeks unspecified damages, civil penalties amounting to $2,000 per violation and restitution.

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