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Judge Rules for Marathon in Gouging Case

A Frankfort judge, in a price gouging case against Marathon Petroleum, has refused to force the oil company to roll back gas prices in Kentucky.

In the wake of April flooding, Kentucky Attorney General Jack Conway accused Marathon Petroleum of price gouging during a State of Emergency declared on April 26th.

Conway wanted Franklin Circuit Judge Thomas Wingate to order Marathon to roll back gas prices to pre-emergency levels, but Wingate has refused to do so.

In a 10-page order, Wingate says Conway failed to prove Marathon’s price increases were unrelated to any increased cost to the seller, despite the oil giant’s admitted use of the spot market to set those prices.

Although the request for injunctive relief is denied, the original price gouging case against Marathon, initiated in 2007 in the wake of Hurricanes Katrina and Rita, continues.

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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.

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Nothing Resolved In Marathon Price Gouging Lawsuit

Kentucky Attorney General Jack Conway and attorneys for Marathon Oil faced off in Franklin Circuit Court this morning.  Conway accuses Marathon of gasoline price gouging during a state of emergency.

Attorney Sheryl Snyder, who represents Marathon, says the case appears to have more to do with price control than price gouging.  “They’re not even alleging that their claim for relief has anything to do with the flooding, or anything to do with the emergency.  They’ve predicated their claim totally on the argument that we’re following the spot market.”

Nothing was resolved at a hearing on Kentucky’s price gouging allegation against Marathon Oil.  Judicial and expert witness conflicts required the matter to be moved to Thursday.  Attorney Sheryl Snyder, who represents Marathon, says there’s no need for a restraining order on gas prices anyway.

“There is no emergency here.  Their expert witness’ affidavit stops at Wednesday.” Snyder says “The prices already started falling on Thursday and today the prices are below the prices they want us to impose.  So, if you granted their order, you would actually be increasing our prices.”