John TownsendRichmond.comWednesday, September 21, 2005AAA Mid-Atlantic urged the nation's lawmakers today to make it illegal for oil companies to make outrageous profits during a time of national emergency. AAA Mid-Atlantic called for a Congressional investigation into whether this region's near-highest-in-the-nation gas prices constituted gouging. The auto club expressed concern that "outrageous profit-taking" may have taken place in its region in the wake of Hurricane Katrina.
In testimony before the U.S. Senate Committee on Commerce, Science and Transportation, AAA Mid-Atlantic's Vice President of Public and Government Affairs, Ronald W. Kosh, told senators, "It appears the industry is making huge profits on the backs of motorists, using a national disaster in the Gulf as an excuse."
"We hope that is not the case in our area," said Kosh. "But absent viable and believable explanations yet to be proffered by the industry, we are left with this troubling possibility. If true, it is unconscionable and should be illegal."
In the days following Hurricane Katrina, Virginia soared to the 17th most expensive state in which to purchase gasoline, an enormous jump for its typical position within the 20 most affordable gas price states. Virginia is the 23rd most affordable position this week.
In the aftermath of the hurricane, Washington, D.C. posted the highest gasoline prices in the nation. So far, this week the District has the most expensive gas in the continental United States, according to the Daily Fuel Gauge Report from AAA Mid-Atlantic.
At one point Maryland was the second most expensive state in the nation to purchase gas, according to the auto club's survey. During the period the cost of gas in Delaware reached as high as third in the nation, according to the Daily Fuel Gauge Report.
Even so, prices have also been similarly as high in New Jersey, Kosh noted, as consumers throughout the Mid-Atlantic states reeled from the highest gasoline prices in history. This afternoon, Kosh called upon senators to get to the bottom of this. Kosh's comments came as the United States Senate Committee on Commerce, Science and Transportation conducted hearings on rising domestic energy prices.
"In the weeks following Hurricane Katrina, gasoline prices in our club's service area--specifically, in the District of Columbia, Delaware, New Jersey, and Maryland--have been some of the very highest in the nation, with industry explanations woefully inadequate," Kosh testified before the full committee hearing.
"AAA Mid-Atlantic is actively monitoring the gas price situation in our region," Kosh declared.
During today's hearing the AAA Mid-Atlantic executive promised: "And we will continue our efforts to assist officials in their quest for the truth about why gas, particularly in the District of Columbia, Maryland, Delaware and New Jersey has been the highest or near highest in the nation, when their neighbors, who draw their gas, often from the same sources, are much lower."
"Concerns about price gouging were raised and heightened in Virginia on Labor Day weekend," Kosh told lawmakers. "That Friday afternoon, a Shell station in Centreville started charging nearly $6 for a gallon of gas. Virginia officials are now investigating that gas station."
"In the club's service area, we have heard the industry's explanations and they don't measure up, and in some instances appear contradictory," Kosh explained to Members of the U.S. Senate. "Does it cost the companies any more to get gas to the mid-Atlantic region? No. Do motorists here use more gas, that is to say, have a higher demand than motorists elsewhere? We don't believe so."
"Could Maryland with the second highest prices in the nation at the time possibly have a demand that exceeds that of California, Pennsylvania, or Ohio? Of course not. Yet this region has persistently, during this crisis, had some of the most expensive gas in the nation," Kosh explained. "And, in fact Delaware, Pennsylvania and New Jersey are in a region with a particularly high concentration of their own refineries."
"Last week when gasoline prices fell below $3.00 per gallon in 30 states, while Washington, D.C. Maryland, Virginia, Delaware, Pennsylvania and New Jersey posted gas at the three-dollar mark and above. All while there are multiple local refineries and, moreover, New Jersey has one of the lowest state gas taxes in the nation."
"AAA Mid-Atlantic recognizes the potential for some unscrupulous owners and vendors to try to take advantage of crisis situations to make a bigger profit," Kosh testified. "In our view, such practices should be illegal, and are certainly unwarranted and unconscionable. They should not be tolerated."
"In the wake of such episodes, we warned motorists to watch for and report any incidents of price gouging. We also advised consumers to avoid those gasoline stations by shopping with their steering wheel," Kosh stated. In addition, AAA Mid-Atlantic has urged state and local officials in its territory to investigate complaints of price gouging. The auto club is also working with officials in the District of Columbia, Delaware, Maryland and Virginia, including, legislators and the state's Attorneys General offices, Kosh noted today.
The Senate Committee on Commerce, Science and Transportation is a standing committee of the United States Senate in charge of all Senate matters related to Interstate commerce, consumer affairs, transportation, highway safety, etc.
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