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Attorney General Lockyer Launches Investigation of Possible Gasoline Price Gouging in Aftermath of Hurricane Katrina Tragedy

Says Probe Will Focus on Potential Unlawful Profiteering by Retailers, Oil Companies
Friday, September 2, 2005
Contact: (415) 703-5837

(SACRAMENTO) – Attorney General Bill Lockyer today launched an investigation into possible illegal profiteering by gasoline retailers and oil companies in the wake of Hurricane Katrina, announcing he will subpoena records from refiners and probe the pricing practices of gas station owners.

“Hurricane Katrina has broken families, devastated communities and destroyed lives,” said Lockyer. “It’s during times such as this that it’s most important we pull together, act with one heart, and rebuild with a sense of community. To unjustly profit from tragedy is unconscionable. I hope this investigation does not find that such greed has afflicted oil companies and gas station operators in California.”

Aside from the subpoenas, Lockyer announced he has established a special email address where consumers, oil company employees, gas station workers and others can submit information and/or documents about gouging and suspected unlawful conduct. The email address is gaspricinghotline@doj.ca.gov .

Lockyer said his office has received complaints from California consumers about rising prices at gas stations following Hurricane Katrina.

Lockyer’s investigation will examine whether oil companies or retailers have colluded to violate antitrust laws, run afoul of state laws that prohibit unfair business practices, or violated state law that prohibits retailers from unduly increasing gasoline prices more than 10 percent during government-declared emergencies. Violations of the price-gouging statute are subject to civil enforcement actions or misdemeanor criminal prosecutions.

The federal government on August 27 and August 28 declared emergencies in states hit by Hurricane Katrina. Lockyer said he would support calls for Governor Arnold Schwarzenegger to declare a state of emergency in California.

Lockyer said he also will work with a task force of Attorneys General from other states to examine gasoline pricing issues related to Hurricane Katrina. Lockyer’s office has been monitoring the gasoline and oil market in California since 1999. The state’s drivers historically have paid some of the highest prices in the country, and suffered chronic price spikes caused by a variety of forces.

Lockyer noted California receives little or no refined gasoline from the Gulf region, and no crude oil. He questioned whether disruptions in the oil and gasoline infrastructure caused by Hurricane Katrina, while no doubt severe, could legitimately explain any significant effect on California’s market. “Certainly, the storm cannot be used to justify gouging Californians while thousands of our fellow Americans suffer,” said Lockyer.

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