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September 16, 2008

Jet Pep officials respond to gouging accusations

By Trent Moore

trentm@cullmantimes.com

HOLLY POND — Jet Pep General Manager Chuck Moore said reports of price gouging at Jet Pep stations are unfounded, noting the reason for potentially higher prices is a more complicated issue than it may initially seem.

“When you try to explain it to a customer over the phone, sometimes it’s hard for them to take in,” he said.

Moore explained that independent companies such as Jet Pep purchase fuel on what is called the “spot market,” which means they purchase surplus fuel from refineries.

“It’s the excess of refineries not sold at their own (stations) ... normally at a lower price,” he said. This is why Jet Pep fuel is normally less expensive than major stations, such as Texaco or Chevron.

With the threat of a possible gas shortage caused by Hurricane Ike, and some refineries in Texas being closed to weather the storm, Moore said the excess gas his company normally purchased at a discounted price was no longer available.

“In a time of panic, there is no excess,” he said.

When the prices suddenly rose due to the fear of a shortage, and with no excess fuel available, Moore said Jet Pep was forced to pay much higher prices to ensure the stations remained stocked with gasoline.

“When that is the only way to get the product, it’s the only way to get it,” he said.

A handful of price gouging complaints were made against Jet Pep locations in the Cullman area, due to prices as high as $4.65 for a gallon of regular gasoline during the past week.

With a state of emergency currently declared in Alabama, price gouging laws went into effect Sept. 12. This is to prevent companies from charging “unconscionable” prices for fuel. What exactly is deemed unconscionable is at the discretion of the State of Alabama Attorney General’s Office.

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