News - Local/State

Saturday, Sep. 13, 2008

S.C. targets price gougers as Ike strikes

As York County motorists waited in long lines Friday to pay $4 or more per gallon of gasoline -- at stations that didn't run out of gas -- the state put its price-gouging law into effect Friday.

The soaring gas prices came as Hurricane Ike bore down on the Texas coast, where much of South Carolina's fuel is produced.

Attorney General Henry McMaster imposed the state's price-gouging law, which means that for the next 15 days, station owners can be charged for excessive pricing.

"Price gouging requires the charging of an unconscionable price not attributed to additional costs or market fluctuations," McMaster said.

It's a misdemeanor offense punishable with a $1,000 fine and/or 30 days in jail, McMaster said. Four S.C. stations made donations to the Red Cross to settle price-gouging charges from the state after Hurricane Katrina cut off the state's gas supplies in 2005.

No charges have been filed with Ike, and McMaster has not set a price that constitutes gouging. Station owners will have to show their wholesale costs triggered the higher prices, he said.

York County Sheriff Bruce Bryant said late Friday: "We're beginning to get complaints and questions. The community is in an uproar due to the price of fuel going up and not being able to obtain fuel."

The state attorney general's office had received more than 200 complaints about high gas prices Friday. The S.C. Department of Consumer Affairs had received more than 100 complaints since Thursday.

Motorists with complaints about gas prices are asked to contact local law enforcement, but they can notify the attorney general's office at (803) 734-3970 or gasprices@scattorneygeneral.com.

Gov. Mark Sanford asked residents to avoid filling up unless necessary.

"Instead, this is a time to think of ways in which each of us can make a difference on what may come our way if refineries in Texas are significantly damaged," Sanford said in statement. "It might mean riding to the football games with a neighbor or on Sunday, riding to church with a friend. It might mean watching a video at home rather than going to the movies or riding to work with a co-worker."

Gas supplies in South Carolina tightened as Hurricane Ike approached the Texas coast.

S.C. gas station trade group officials did not know how many stations were without fuel Friday, but reports said gas supplies were low at terminals in North Augusta and Spartanburg.

An estimated 45 of the 53 Hot Spot stations across South Carolina and North Carolina were without gas, said David Jordan, the chain's marketing director and president of the S.C. Association of Convenience Stores.

Jordan said he did not know when he would be able to get gas again for some of the stations or how much the fuel might cost.

"This is worse than Katrina because everything was shut off so early," he said.

About 10 refineries were shut down on the Texas coast as the storm was expected to make landfall late Friday or early today near Galveston.

The Colonial Pipeline, the main fuel supply artery from the Gulf of Mexico to the Carolinas, was shipping a reduced amount of gas Friday as fuel production has dropped, spokesman Steve Baker said. Colonial was not shipping diesel or jet fuel because of evacuation of pipeline employees and supply shortages, he said.

Ike is coming when supplies already were pinched by refinery shutdowns in Louisiana in the wake of last week's Hurricane Gustav.

Now that those refineries are coming back online, the refineries in Texas are shutting down.

Some refiners are holding back supplies to make sure they have enough for their bigger customers, said Brian Milne, an editor for DTN, which tracks the gas and oil markets.

In other cases, refiners along the Texas coast are keeping fuel inside their tanks because full tanks can better withstand effects of the storm, said David Ruisard of Platts energy information service.

Refineries are better prepared for a big storm since Hurricanes Katrina and Rita battered the Gulf in 2005, Milne said. They are evacuating sooner and building better protection.

For that reason, Ruisard expects pump prices to drop sharply after Ike passes because the refineries should be able to restart sooner.

The wild card, Milne and Ruisard said, is how soon the refineries can restore power after the storm.