Tennessee investigates price gouging; Smaller chains struggle to truck in gasoline

Some reports say gas being sold as high as $9.99 per gallon

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KNOXVILLE (WATE) – The state of Tennessee says it received nearly 600 complaints over the weekend, mostly from the Nashville area, about gasoline prices and possible price gouging. Some complaints said gas was being sold for as high as $9.99 per gallon.

The complaints came after the Colonial Pipeline that supplies much of the gas to East Tennessee partially closed on September 9 after a leak was discovered in Alabama. AAA of Knoxville said the tighter tighter supply may drive up the price of crude and gasoline in Tennessee.

Colonial Pipeline says it is constructing a temporary pipeline to bypass the leaking section. Between 252,000 and 336,000 gallons leaked from the pipeline. It’s unclear when the leak began.

This is a complicated and unusual situation. While two gas stations may be across the street from each other, fuel supplies may vary. Big name stations like Shell or BP have contracts with their parent companies, so they get a more constant supply and receive fuel first. Other places, like Weigel’s, are struggling to truck gasoline into East Tennessee because they may be getting pushed to the back of the line.

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It cost about $27 for Haley Tracy to fill up.

“That’s about average, $25 is usually where it hangs out around,” Tracy said.

Things at Weigel’s off Kingston Pike in West Knoxville Monday didn’t look the same.

“When I pulled in and I saw some of the pumps were covered, I started getting a little nervous because I’m on E and I need gas to get places,” added Tracy.

AAA says over the next few days gas is being shipped in from other places, while there’s no wide-spread outages in East Tennessee supplies may be a little restricted.

“Areas that are a little bit harder to get to, they could run out of gasoline sooner than the large cities could,” said Stephanie Milani of AAA Tennessee.

“We’ve come to rely on it so much today, everything we do is, we drive,” said Tim Hatmaker of Knoxville.

The announcement led to shortages at some stations around Tennessee. Spokesperson for Tennessee Emergency Management Agency Dean Flener says as long as consumers continue with normal gas usage, then Tennessee won’t have a shortage. AAA says prices should return to normal after the pipeline is fixed.

AAA says because fuel is being shipped via truck, the price of freight is added on to what we pay, which explains why it’s more expensive.

“So some stations are going ahead and raising prices because they know that their next shipment is going to cost them more than what they have in the ground. However, there are rules and regulations that the state oversees for price gouging. And the last time that we really had an issue with price gouging was hurricane Ike in 2005,” added Milani.

The Tennessee Department of Commerce and Insurance says most of the 600 complaints center around gas under $3 per gallon, but some were as high as $9.99. They have no reports of anyone actually paying that much and it may simply be an indication that the station is out of gas. They say they will respond to each complaint as they would in any other circumstance.

Price gouging laws in Tennessee make it unlawful for anyone to charge unreasonable prices for goods and services, including gasoline, in direct response to a disaster. If it appears price gouging has occurred in any of these cases, the complaint could be referred to the Attorney General for review and investigation. The Attorney General could seek a temporary restraining order, temporary injunction, permanent injunction, civil penalties up to $1,000 per violation, and/or negotiate and accept an assurance of voluntary compliance.

AAA believes once the pipeline is fixed, costs will likely go down. “If it goes up, it goes up. I have to get gas either way,” said Tracy.

Bill Weigel says this situation is unlike anything he’s seen before. Weigel’s stores are hauling gasoline in from out of state and Weigel says they can only get small amounts of fuel. The stores are trying to divide the limited fuel as best they can. Weigel adds he hopes repairs on the pipeline are complete by the end of the week.

The Tennessee Fuel and Convenience Store Association says in a statement large volume fuel deliveries by barge are now reaching the Nashville terminal, which will increase supply in Middle Tennessee. The waiver on driver hours of service signed by the Governor on Friday has helped.

Emily LeRoy of TFCA says, “A station that you see out of gas at one time could have gas in the next hour. Consumers will continue to see intermittent outages as the industry works hard to get fuel back at the pumps.”

TFCA adds the amount of fuel being refined and available for sale has not changed. Fuel is available. What has changed is that fuel distributors must drive longer distances to get fuel for customers.

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