Business

State probe of gas prices reaches city

A Charlotte gas station owner has been subpoenaed by the N.C. Attorney General's Office to explain why he hiked his price 60 cents a gallon one afternoon earlier this month.

The price-gouging subpoena, announced Monday, is the first one in the Charlotte area. It's part of growing investigation by N.C. Attorney General Roy Cooper into gas pricing related to Hurricane Ike, which struck the Texas coast Sept. 13 and disrupted gas supplies to Charlotte and much of the Southeast. Cooper has issued 26 subpoenas.

Randy Helms, owner of Oak Hill Deli & Grill in northwest Charlotte, learned of the subpoena Monday. It hadn't been delivered as of Monday evening.

Helms did raise his cash price Sept. 12 to $4.49 a gallon from $3.89 – six times his normal mark-up. But he says he did the right thing because he wanted to protect his supply for loyal customers, including churches and small businesses that depend on him and are billed monthly. He also said arguments were breaking out at his gas pumps that Friday afternoon, so he raised the price to discourage sales and promote conservation.

The Observer ran a story about Helms' station and the price hike on the front of the business section a week ago.

Helms said he didn't run out Friday or any other day. Other stations did. On Sept. 14, a Sunday, he dropped his gas price to $3.99 once he was assured by his distributor that supplying the station wouldn't be a problem, he said.

The area's gas shortage has persisted as several Gulf Coast refineries are still without power or are in the middle of coming back online, which generally takes about 10 days, according to the U.S. Department of Energy.

Some Charlotte stations this week have been intermittently running out of fuel.

Responding to a rush of consumer complaints, Cooper started issuing subpoenas Sept. 15 under the state's anti-gouging law. The governor declared a state of “abnormal market disruption” on Sept. 12 and signed an order allowing Cooper to enforce the law. Cooper's office has been combing through thousands of complaints from consumers and hand-picking station owners to question.

The state law and Cooper's investigation raises the question of whether one person's price gouging is really another's smart business decision. There's no specific formula to determine what price is considered gouging. And Cooper has said he'll use several factors, such as wholesale price and quantities.

The subpoenas, which are delivered by local sheriff's departments, are meant to collect information on pricing and not assign immediate blame, said Noelle Talley, a Cooper spokeswoman. Helms might have had good reason to raise his price, she said. Retailers who are subpoenaed have 10 days to explain why prices rose so suddenly and could be fined up to $5,000.

“It's crazy,” Helms said Monday. “I think over the whole weekend, I sold 1,500 to 2,000 gallons. It's not like I made a whole bunch of money. I think they'll give me some grace.”

He said he'll cooperate fully with the investigation.

Helms said many stations in the Charlotte area are still selling gas at $4.29 a gallon even though a wholesale price quoted to him on Monday was $3.53 a gallon. The real price gouging is happening now, he said.

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