Press Release

May 16, 2011

Maryland Attorney General Douglas F. Gansler is investigating a Rockville gasoline distributor after prices at the pump jumped 25 cents overnight last week, he said Monday.

The inquiry takes place as Senate Democrats prepare a vote on legislation that would curb federal tax subsidies to the largest oil companies.

Gansler said Empire Petroleum Holdings, which serves gas stations in Anne Arundel and Montgomery counties, has cooperated with his investigation, which he said he launched in response to a consumer complaint.

Empire did not respond to a request for comment Monday evening.

Retailers served by Empire say the distributor blamed the price hike on flooding in the Midwest, Gansler said during an appearance at a Baltimore gas station Monday with Sen. Benjamin L. Cardin. He said prices dropped by 13 cents the day after he sent Empire a letter.

Gansler said he had not sent similar inquiries to other distributors in the state, “but that doesn’t preclude us from doing so in the future.” Because Maryland lacks a price-gouging law, he said, his office can do little beyond questioning distributors under consumer protection and antitrust law.

With the average cost of a gallon of regular unleaded nationwide hitting $3.96 over the weekend, according to AAA Mid-Atlantic, Senate Democrats are taking aim at the oil giants.

Cardin, a Maryland Democrat, has co-sponsored legislation to eliminate tax subsidies to the so-called Big Five U.S. oil companies. Exxon Mobil, Conoco Phillips, Chevron, Shell and BP America reported a total $36 billion in profits for the first quarter of 2011.

Supporters of the Close Big Oil Tax Loopholes Act say it would save the federal government $4 billion annually. Opponents say elimating the subsidies would amount to new taxes, which they say would hurt businesses and consumers who already are struggling.

Senate Democrats are planning a vote for Thursday; Republicans have threatened a filibuster.

With car and truck noise in the background, Cardin said eliminating the subsidies would help narrow the federal budget deficit.

Cardin said the measure would not have an immediate effect on gas prices.

Service station operators said they have become the focus of customer anger, an industry spokesman said, even though the earn only a penny or so per gallon.

“When we talk about the dealers, we are talking about the consumers,” said Roy Littlefield, executive director of the Washington, Maryland, Delaware Service Station and Automotive Repair Association. “Credit card companies are making more than the dealer.”

Gansler said a state probe into gasoline prices could be stronger if Maryland had a tough price-gouging law. Twenty-seven states and the District of Columbia have passed such laws; efforts to pass one in Maryland have failed in recent years.

“It would allow an attorney general to issue subpoenas or issue inquiries to find out whether the price rise was justified or not,” and see what was behind it, he said.