Marathon Oil comes under fire at price gouging hearing

A big oil company took heat in a central Kentucky courtroom Thursday, all because of how much it's been charging customers for gas.

Kentucky Attorney General Jack Conway claims Marathon Oil gouged prices last month, as Kentuckians dealt with extensive flooding in the state.

Marathon argues Conway's allegations are politically motivated.

Both sides in this case gave arguments Thursday in a Franklin County courtroom.

Petroleum Economics Expert Peter Ashton testified for the attorney general's office.

Ashton says Conway has a strong case against Marathon.

"Gasoline prices were increasing while, at least, crude oil costs were remaining relatively constant," Ashton testified. "And in fact, in the later portion that's shown here in the declaration period, crude costs were falling at a time when Marathon's gasoline prices were increasing. Which is, as I think I did testify, suggestive to me that Marathon's margins were if anything increasing during the declaration period."

Marathon argues the gas price increases were seasonal, as prices typically rise as we head toward the summer months.

Dr. Ramsey Shahata, an economic expert, testified that Marathon makes decisions on price and where to deliver the gas based on how much they could sell that same gasoline somewhere else.

The expert showed graphs indicating that the gas sold in Kentucky during the 'State of Emergency' was the same price as gas sold in Chicago and Indianapolis.

He says the flooding in the state had no impact on the price of gasoline.

The Commonwealth says those are just the opinions of one expert and are not based on fact.

Governor Steve Beshear declared a state of emergency in Kentucky April 26, due to the flooding. Conway says that declaration also triggered the price gouging statute.

In the motion, Conway requests Marathon lower its wholesale prices in Kentucky markets to no more than the price charged on April 25, the day before the state of emergency was declared.

The current state of emergency for Kentucky is set to expire one week from today, on May 26, unless the governor extends it.

The judge is expected to make a ruling in this case within the next week.

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