Granholm Calls for Monitoring of Gas Prices; Legislators to Prohibit Gouging by Law

Contact: Elizabeth Boyd 517-335-6397

February 27, 2003

In an Executive Directive signed today, Governor Jennifer M. Granholm directed the Michigan Department of Agriculture, in cooperation with the Michigan Public Service Commission, to conduct routine surveys of gasoline prices in Michigan. Further, the Governor is directing the department to refer information about potential unfair pricing practices to the Attorney General for possible action under the Michigan Consumer Protection Act.

Companion bills to be introduced by Representative Kathleen Law (D-Gibraltar) and Senator Ray Basham (D-Taylor) would, for the first time, add a legal cause of action to the Michigan Consumer Protection Act that would expressly ban the practice of price gouging during States of Emergency declared by the Governor. Currently, the law contains no specific prohibition against gasoline price gouging, even in the face of a state emergency.

“Less than two years ago, fears about national security resulted in what appeared to be price gouging by a small number of service stations,” Granholm said today. “The anxiety felt by consumers in those difficult days has begun to reappear in recent weeks as gas prices have increased dramatically. Our state departments are doing their part to ensure that we’re prepared to protect our citizens in times of uncertainty – we need to pass this important legislation quickly to protect them in the future.”

“Gouging consumers during a time of crisis is an absolute outrage and will not be tolerated,” Law said. “Gas stations and oil companies that turn public fear into obscene profits must be held accountable. We applaud the Governor’s action and urge our colleagues in the House and Senate to pass this legislation.”

"High fuel prices are cutting into the pocketbooks of consumers, small businesses, and companies across the state," Sen. Basham said. "We need to ensure that motorists are not being gouged by big oil companies that are exploiting the Middle East situation to make a quick buck."

In addition to forwarding potential unfair pricing practices to the Attorney

General for possible action, the Governor has also directed the Department of Agriculture to establish a system to proactively disseminate information to the public about gas prices, as well.

“Today’s price increases are due, in part, to the looming threat of war in the Middle East and an anti-government strike in Venezuela,” Granholm explained. “Our goal today is two-fold: to help consumers get information that will allow them to pay the lowest possible price for gasoline, and to assure consumers – and retailers – that we’re watching the price of gas closely.

We cannot ignore the fact that high gasoline prices negatively impact the overall health of Michigan’s economy, our tourism industry, and individual consumers who are entitled to a fair and competitive market for gasoline,” Granholm added.

The Governor noted claims by the American Automobile Association that recent increases in gasoline prices are not justified and has strongly urged the gasoline industry to show more restraint in the pricing of gasoline.

While serving as Attorney General, Granholm was vigilant about taking action against service station dealers who increased their prices following the September 11 attack on the World Trade Center. Granholm took action against 48 gas stations. The stations were required to refund more than $100,000 in overcharges to consumers and to pay approximately $30,000 in civil penalties which went to the General Fund.