Experts Testify in Gas Price Gouging Case

In Frankfort, two economic experts battled it out in a day long hearing in Kentucky’s gas price gouging case against Marathon Petroleum.

The state is accusing Marathon of gasoline price gouging during a state of emergency declared on April 26th and still in effect. Peter Ashton, a consulting economist for the attorney general’s office, said the price hikes were grossly in excess of pre-emergency prices.

“And furthermore, based on other data that I had looked at, I believe that cost increases could not justify those particular price increases,” he said.

Marathon doesn’t deny that is uses commodity spot market prices to help make pricing decisions.

“In my experience, I’ve never seen a refiner that would not look at spot prices,” said Marathon consultant consultant Ramsey Shehadeh. “They’ll certainly consider their manufacturing costs in deciding how much crude to run, but in terms of setting the price for the gasoline they sell, they’re always thinking about what their options are and when their outside option is the spot market, that’s going to drive their rack price.”

The state wants Franklin Circuit Judge Thomas Wingate to order Marathon to restore pre-emergency gas price levels, but he made no immediate ruling.

Published by Tony McVeigh

Veteran broadcast journalist Tony McVeigh has been covering Kentucky politics since 1986, reporting for Clear Channel Communications before joining Kentucky Public Radio in 2004. His stories are aired by seven KPR affiliates, whose signals blanket the Commonwealth and parts of surrounding states. McVeigh began his broadcasting career at WRFC in Athens, Georgia, while earning a Bachelor of Arts in Journalism from the University of Georgia. He has extensive anchor/reporter experience, including stints with South Carolina Network and Georgia Radio News Service in Atlanta. In 2007 and 2008, McVeigh was named Best Radio Reporter in the Kentucky Associated Press Awards. He also picked up consecutive AP Awards for Best Political Coverage. McVeigh won four Kentucky AP Awards in 2009, six in 2010 - including Best Political Coverage and Best Hard News Feature - and three in 2011. His coverage of the 2007 Kentucky governor's race topped the Political Reporting category of the Society of Professional Journalists Green Eyeshade Awards of 2008. In 2009, McVeigh placed second in Courts and Law Reporting in the Atlanta-based competition for journalists in 11 Southern states. McVeigh is also the proud recipient of an Individual Liberty Award from the Kentucky Association of Criminal Defense Lawyers. The Brunswick, Georgia, native is a die-hard UGA football fan who enjoys photography, astronomy, live music, hiking Kentucky's Red River Gorge and exploring the state's beautiful back roads. McVeigh and his big, fat, black cat Simon, reside in Frankfort, KY.