Zero tolerance for price-gouging
Published 2:38 pm Wednesday, May 30, 2007
With gas prices averaging better than $3 a gallon in Mississippi, those who sell fuel don’t have a whole lot of public sentiment in their corner.
They make an easy target for a headline-seeking politician in an election year.
Sometimes, though, good politics also makes for good policy.
Such is the case with Attorney General Jim Hood’s crackdown on gasoline distributors accused of price-gouging following Hurricane Katrina.
Hood announced that five Mississippi distributors have agreed to pay the state almost $300,000 in combined penalties rather than go to court. The five companies did not acknowledge any wrongdoing following the 2005 killer storm, but the implication of the settlement is clear. A company doesn’t fork over that kind of money if it thinks there’s nothing to the accusations.
Hood said he will sue two other oil companies who did not agree to settle.
Pricing gasoline can be a complicated business, but what the state law says about price-gouging after a natural disaster is not. Companies are not expected to take a loss, but nor are they allowed to jack up their profits to take advantage of others’ misery. The distributors can raise their prices to cover the higher prices being charged to them or other new additional costs, but they can’t get greedy and add more than that.
“If you are making a dime a gallon before an emergency is declared, you keep making a dime afterwards,” Hood said.
The price-gouging, which Hood’s investigation confirmed in 40 percent of the companies it scrutinized, was actually small in financial magnitude. The companies that settled allegedly had illegal profits totaling about $33,000 — not much money over a four-month time span for one distributor, much less five.
Still, the message of Hood’s crackdown is worth sending.
When there’s a state of emergency and people are desperate for a commodity, it is unconscionable for a business to take advantage of the situation. No matter how small the rip-off, it should not be tolerated.