STATE INVESTIGATING CURRY COUNTY GAS STATIONS
September 18, 2001 11:00 pm

Gas station owners in Brookings, Gold Beach, Bandon and Coquille have been served civil investigative demands (CIDs) by Oregon Attorney General Hardy Myers.

Myers announced Tuesday that CIDs had been served on owners throughout Oregon following an investigation of gasoline price gouging in the wake of last weeks terrorist attacks.

Within hours of the horrific terrorist attacks on the East Coast, our consumer hotline became jammed with consumer calls reporting sharp, unreasonable increases in gasoline prices, said Myers.

We will not tolerate unconscionable profiteering during this national emergency, he said.

The Oregon Department of Justice received more than 1,000 calls complaining about price spikes. One reported a station in Jefferson County charging $4.29 a gallon.

Price increases of 30 to 40 cents a gallon were reported in Coastal, Southern and Central Oregon counties.

In Brookings, gas price increases ranged from 10 to 20 cents.

The CIDs were also served on gasoline dealers in Grants Pass, Bend, Sisters and Redmond, and additional ones were expected to be served.

These fact-intensive investigations are the beginning of a process to determine if what has been reported by consumers is indeed price gouging, said Myers.

We must separate what would be considered a legitimate flux in the marketplace from opportunistic activities of unscrupulous dealers charging excessive and unjustified gasoline prices, he said.

His department contacted consumer protection offices in other states and found that while all states have experienced price hikes, not all of them have been excessive.

Price gouging statutes exist in 18 states, with 16 of those triggered by declarations of emergencies or natural disasters. Many of those states sued dealers immediately. Oregon, however, has no price-gouging law.

Myers asked citizens to report any gasoline prices of more than $2 a gallon for regular unleaded, or misleading explanations for price hikes. At least three gas stations in the Brookings-Harbor area were observed raising the price for regular unleaded to $2.03 following the terrorist attacks.

One consumer reported a dealer who said customers should buy now because prices would shoot up to $6 a gallon, Myers said.

To report price gouging, call toll-free at (877) 877-9392. The justice departments Web site is http://www.doj.state.or.us.

Consumer Information Coordinator Jan Margosian said her department, through the serving of CIDs, has asked the station owners for their records.

From that, the department will know whether or not to take action under the unconscionable practices section of Oregons Unlawful Trade Practices Act.

Margosian said her department will look at each situation individually. She said the increase is more important than the price, because some areas had high prices all summer. Most of the complaints, she said, came from smaller towns.

She said because Oregon has no price gouging law, there is no price level that automatically defines gouging.

She said cases where dealers raised their prices by 25 cents a gallon within four hours of the attack may be obvious examples of gouging.

Margosian said even the American Petroleum Institute denounced retailers who took advantage of the terrorist attacks.

She said institute spokesmen stated there has been no disruption in the petroleum supply and there is no reason for price spikes.

Given that, she said, the justice department will look closely at big price increases, and misrepresentations to explain increases.

If the department determines a violation has taken place, the dealer could be fined up to $25,000.

The department, said Margosian, would first have to offer the dealer a settlement agreement, which she described as being similar to plea-bargaining.

The dealer would have to give an assurance of voluntary compliance.

That may include restitution to customers or money for consumer education programs. If no settlement agreement is reached, the department can sue the dealer.

In either case, said Margosian, her department will make the name of the dealer available to the public if a violation is determined.

She said some dealers lowered their prices when they heard of the attorney generals investigation.