Marathon Responds to Pricing Allegations in Kentucky
Company Files Lawsuit to Challenge State Law
Marathon Oil Corporation (NYSE: MRO) issued the following statement in response to a suit filed today by the Kentucky Attorney General against Marathon Oil Corporation, Marathon Petroleum Company LLC and Speedway SuperAmerica LLC seeking restitution and alleging violations of the Consumer Protection Act and the Kentucky price gouging law.
"We are very disappointed with the actions taken by the State of Kentucky, and Marathon will vigorously defend itself in this enforcement action," said Gary R. Heminger, Marathon executive vice president and president of Refining, Marketing and Transportation operations.
In 2005, Marathon subsidiary Speedway SuperAmerica LLC (SSA) was informed that its retail operations in Kentucky were under investigation for alleged gasoline price gouging utilizing a new and extremely vague law. The Attorney General began by reviewing the timeframe following the 2005 hurricane season. The Attorney General subpoenaed financial records from Marathon and SSA and numerous other retail gasoline marketers. From the beginning, Marathon has cooperated fully with the Attorney General on this investigation and participated in a number of discussions. However, the Company has not been contacted by the Attorney General's office since January 2007.
"We do not believe that we violated the law. In fact, we are very proud of our Company's response in the wake of hurricanes Katrina and Rita to keep fuel supplies available when 25 percent of the domestic crude oil production and 15 percent of the nation's refinery capacity was shut down by these historic storms. Our product pricing during the time in question was made responsibly, using the same market-based, supply and demand pricing fundamentals we use every day.
Marathon believes that the law, which Kentucky Attorney General Stumbo cited in bringing suit, is not only unclear, but unconstitutional. The Attorney General himself has stated the law on price gouging is unclear, both today and previously. Due to the lack of clarity and other issues with the current law, Marathon today filed suit in federal court in Frankfort, Ky., challenging the constitutionality of the law and the interpretation taken by the Attorney General.
"Our goal each day is to provide our products at a competitive price at each of our retail locations. We have a 100-year history of supplying the Midwest markets with quality products, and we have been recognized for our strong ethical standards," Heminger added. "We will continue to focus on providing quality products to the citizens of Kentucky and the Midwest, and we are confident we will be successful in our defense of this lawsuit."
Updated: Tuesday, May 15, 2007
