Maryland’s attorney general is probing whether a Rockville gasoline company improperly used the Mississippi River flooding as an excuse to raise gas prices as much as 25 cents overnight. The investigation comes on the heels of D.C. Attorney General Irvin B. Nathan’s announcement that he is investigating another company, Capitol Petroleum Group, for accusations of illegally inflating fuel prices.
In a letter to Empire Petroleum, Maryland Attorney General Douglas Gansler expressed concern about “sudden and dramatic” increases in gasoline prices at stations supplied by the company, which told its retailers that prices had to be raised about 25 cents a gallon because of the Mississippi River flooding.
Empire Petroleum does not operate gas stations, but distributes motor fuels to stations in 12 states, according to its website.
“It is not clear to us … how the potential for flooding along the Mississippi River would have significantly increased your gasoline distribution costs,” Gansler wrote to Eli Kimel, the company’s chief executive.
Several messages left Thursday at Empire Petroleum’s offices were not returned.
The average price for gas in the Washington region is $4.07, according to AAA Mid-Atlantic auto club. A month ago it was $3.82.
Gansler requested information from Empire including documents detailing the company’s purchases and sales of gasoline from suppliers along
the Mississippi River.
A spokeswoman for Gansler, Raquel M. Guillory, said the state does not have a gouging statute, though she said the office supports the implementation of a law that would allow the state to prosecute violators. Some states without anti-gouging laws have a statute take effect during certain emergencies like hurricanes and tornados, she said.
“We don’t even have that kick in,” Guillory said.
In D.C., Nathan said his office is investigating whether Capitol Petroleum Group, owned by Eyob Mamo, violated antitrust laws to raise gas prices. Ariel Waldman, senior counsel to Nathan, said Thursday he could not elaborate on the investigation.
Capitol Petroleum owns and has business dealings with 164 area stations, according to its website, and generated about$778 million in revenue in 2010.
Mamo did not return calls for comment, but in a statement released Thursday to the Washington Post, Mamo said there “is a gross misunderstanding … about how a gallon of gasoline is actually priced.” He said while he owns gas stations, he does not control how much gas costs.
Asked whether there are similar probes underway in Virginia, Brian J. Gottstein, a spokesman for Attorney General Ken Cuccinelli, said he can’t “confirm or deny the existence or nonexistence of investigations.”
