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AG Cooper takes action on gas prices

Release date: 10/10/2005

Gas distributor pressed low-priced Durham station to “get with the program and raise prices”

Raleigh: Attorney General Roy Cooper has filed suit to stop a gas distributor accused of illegally conspiring to fix prices and trying to force at least one gas station to raise its prices by $0.40 a gallon.

I won’t stand for a gas supplier leaning on a local station to hike prices,” said Cooper. “Consumers and businesses are already paying more than ever before for gas. They don’t need gas prices hiked even more by somebody trying to make a fast buck.”

Cooper filed suit on Friday against fuel distributors McLeod Oil Company, Inc. and Home Oil, Inc. of Mebane, their manager Wesley C. Mehring of Burlington and any unknown co-conspirators alleging that the defendants fixed the price of gas sold in Durham County and sought to coerce a local gas station to raise its prices. Cooper is asking the court to block the companies’ illegal practices, to fine the defendants $5,000 for each violation, and to require the companies to give up any illegal profits.

As alleged in the complaint, McLeod Oil Company and its affiliate, Home Oil, Inc., have an agreement to supply gas to A&P Mini Mart at 1709 Glenn School Road in Durham. Under their agreement, McLeod owns the pumps and tanks and A&P Mini Mart sells the gas. With each shipment of gas, McLeod provides Steven M. Grover, who runs the Mini Mart, with a range of suggested prices and what the gas station’s share of the revenue would be at each price level. Grover typically selects the lowest price listed.

According to Grover’s affidavit, representatives from McLeod came to his store on September 28 and demanded that he immediately raise gas prices by 40 cents a gallon. McLeod told Grover that competing gas stations also supplied by McLeod were angry with A&P Mini Mart’s low prices, and that Grover needed to be “in the ballpark” of the other stations’ prices. Grover refused to hike his prices, asked the representatives to have manager Mehring contact him in the morning, and then left to attend Wednesday evening church services with his wife. When church ended, Grover got a message from a Mini Mart employee that McLeod had padlocked the gas pumps.

The next week, as explained in the affidavit, another representative from McLeod’s came by the A&P Mini Mart and asked if the store was ready to “get with the program and raise your prices.” Grover’s wife declined, and two days later McLeod removed all of the gas from the underground tanks at A&P Mini Mart.

Soon after Cooper’s office filed suit on Friday, the defendants agreed to remove the padlocks at A&P Mini Mart by noon today and supply the station with gas that it can sell at its usual rate until the matter has been addressed by the court.

Since gas prices skyrocketed following recent hurricanes, Cooper’s office has received hundreds of calls and dozens of written complaints from consumers about the high cost of gas. Anyone who has evidence of illegal activity related to gas sales is encouraged to call 1-877-5-NO-SCAM to file a complaint.

“We asked people to let us know if they saw evidence of price fixing or other illegal tricks to raise gas prices, and now we’re taking action,” said Cooper.