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.