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 Asks Court to Require Marathon Oil to Lower Wholesale gas Prices;



Attorney General Jack Conway today filed a motion for a temporary injunction in Franklin Circuit Court alleging that Marathon Petroleum Company LLC illegally raised the wholesale price of gasoline and other motor fuels in markets across Kentucky during a time of emergency.

"I want to thank Kentuckians who called or emailed our office to report the drastic changes in gas prices that reached more than $4 a gallon at the pump in many communities," General Conway said. "Gas prices jumped about 30 cents overnight. The tips provided by consumers and retailers helped us bring this action that will hopefully provide some relief for Kentuckians who are struggling to put gas in the car and clean up from flooding."

The motion alleges that Marathon violated Kentucky’s price-gouging statute (KRS 367.372, et seq.) that was triggered when Gov. Steve Beshear declared a state of emergency on April 26 in the wake of massive flooding.

"General Conway and I recognize the importance of protecting Kentucky consumers, particularly in the wake of recent devastating storms and floods," Gov. Beshear said. "I issued the price-gouging executive order precisely so our Kentucky families will be protected from attempts to profit from disaster. I fully support the Attorney General’s ongoing efforts to investigate instances of price gouging and bring offenders to justice."

The motion, filed today in the ongoing case against Marathon and its wholly owned subsidiary, Speedway LLC, for alleged price-gouging violations following Hurricanes Katrina and Rita in 2005, asks the court to require Marathon to lower its wholesale prices in all Kentucky markets to no more than the price charged on April 25.

The motion uses an example of the Louisville wholesale market to illustrate the allegations. The motion alleges that Marathon’s wholesale price for regular 87 octane gasoline at its Louisville terminals on April 25 was $3.25 per gallon and that it raised its wholesale price to $3.48 on April 29 and up to $3.46 on May 9. Thursday’s rack price was $3.32. Wholesale prices for reformulated gasoline were raised from $3.45 to $3.65 and $3.61 on those dates. The wholesale prices vary depending on the location in Kentucky and the amount of fuel purchased, but similar reductions would be expected in all Kentucky wholesale markets.

Attorney General Conway is alleging that Marathon’s actions violate the price-gouging law, since the law only permits suppliers to increase prices if there has been an increase in costs to the supplier. The Office of the Attorney General does not believe that cost increases in this case justify the price increases. The memorandum supporting the motion alleges that Marathon’s increase of price was unsupported by any increase of costs, but instead was linked to an increase in the commodity spot market price and New York Mercantile Exchange future prices. Marathon has previously admitted in the case that spot market prices have been a primary factor in its pricing decisions.

A hearing on the motion is set for Monday at 9 a.m. in Franklin Circuit Court.

Wholesale Gas Price Investigation

The Attorney General’s office also launched an investigation in the summer of 2008 into the wholesale price of gasoline and how it affected prices in the Louisville market. According to information gleaned during that investigation, the Office of the Attorney General believes that Marathon’s acquisition of Ashland Oil in 1996 negatively impacted competition in the gasoline market in Kentucky and in particular in the market for reformulated gasoline (RFG), which is required to be sold in Louisville and Northern Kentucky.

Today, General Conway announced that his office is referring that antitrust investigation to the Department of Justice’s recently created task force formed at the request of President Obama to investigate allegations of fraud and market manipulation in the oil and petroleum industry.

"Our investigation is complete, and we feel there is sufficient data and information that the task force will find useful in its review of the industry and how industry operations may negatively affect consumers and prices at the pump." General Conway said.

Marathon has publicly admitted that it supplies virtually all of the RFG used in Kentucky. According to a petroleum industry expert, who reviewed the market data at the request of General Conway’s office, wholesale prices in Louisville have increased following Marathon’s acquisition of the Ashland refineries, and retail prices are higher than would be expected in a competitive market.

 

Charging stations proposed for I-64 as electric cars become more common;

Ralph Tharp wants to build a recharging system for electric cars on Interstate 64 to accommodate the vehicles as they become more popular.

Tharp outlined the Kentucky Electric Highway to a handful of local elected officials and utility company executives at the Paul Sawyier Public Library Wednesday.

Tharp envisions a network of plug-in recharging stations at rest areas, restaurants, tourist attractions and gas stations between Lexington and Louisville.

A national survey reported 53 percent of those surveyed would consider buying an electric car if gas cost $4 per gallon or more, he said. The national price was $3.97 as of Monday according to the U.S. Energy Information Administration.

Franklin County Judge-Executive Ted Collins said he saw regular gas for $4.29 a gallon in Louisville recently.

“We can expect to see more electric cars on the highway before long and we’ll have to have a place to charge them,” Collins said.

I_love_Kentucky_NewsI_love_Kentucky_NewsTharp said he will apply for a grant from the U.S. Department of Energy to fund planning and design for a recharging system. The application is due in June and recipients could receive between $250,000 and $500,000. The money would not be used for buying or installing equipment, Tharp said.

The U.S. Department of Energy has a goal of seeing 1 million electric cars on the road by 2015.

A recharging network would improve economic development and tourism, Tharp said.

Such a plan would be the first outside of Oregon, Washington and California. Those states created a similar system stretching more than 1,300 miles on Interstate 5 from Seattle to southern California with recharging stations every 40 to 60 miles, Tharp said.

Ross Hopkins, of the Frankfort Plant Board, suggested that representatives in Kentucky contact officials in Oregon and Washington to find out what obstacles they faced with their system.

Kentucky is a prime location for such a system because of its low electricity costs, about 6.5 cents per Kilowatt-hour, and central location, Tharp said.

However, there are a number of questions that must be answered, such as where the recharging stations would be located, what kind of equipment would be used, who would own the system and what rate would be charged.

“I don’t have answers, and probably no one in this room has the answers yet,” Tharp said.

Residential charging units can take six to eight hours to recharge an electric car, while more advanced “fast charging” equipment can do it in about 30 minutes, Tharp said.

Utility officials at the meeting said it’s illegal to re-sell electricity for a profit in Kentucky.

Greg Butler, Franklin County’s solid waste supervisor, said he was involved with a similar project in Eugene, Ore. That city charged drivers for the parking space based on the time they occupied the spot rather than power used as one way to avoid selling electricity, Butler said.

Tharp said a credit card system could be included at the charging station to make payment easy.

Grant recipients could be announced in July or August, and the planning stage could last up to a year, Tharp said.

By Paul Glasser
The State Journal

Clarks Pump and Shop located on US 60 at the Boyd –Carter County line robbed;

(Ashland, KY) -- The Kentucky State Police in Ashland is seeking the public’s assistance locating two suspects responsible for the burglary of Clarks Pump and Shop located on US 60 at the Boyd –Carter County line near Ashland, KY. The Kentucky State Police responded to an alarm activation at 0448 hours this morning at the store. Upon arrival, troopers discovered the front door of the store had been busted and the perpetrators left with $1,078 dollars worth of various brands of cigarettes.

Surveillance video shows a maroon colored bob-tail Peterbilt tractor pull into the store and two white male suspects (one of them is shown above) entering and exiting the store. The vehicle had been reported stolen on 4-24-11 from a truck stop in Auburn, Indiana.

Anyone with any information on the identity of the suspect(s) or information concerning the vehicle theft is asked to call the Kentucky State Police at 1-800-222-5555 or 606-928-6421. Callers may remain anonymous.

 

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