Posted in: Gas Prices,
by Gregg Laskoski on Mar 6, 2012 12:48 PM
Every once in a while, we, the people, win one.
Congratulations are in order for the Michigan Attorney General's office, which earlier this year successfully prosecuted five cases of retail gasoline price fixing.
Stations investigated and prosecuted for price-fixing were all located within two miles of each other in Madison Heights. An investigation by District Attorney Bill Schuette's office determined that five stations were setting their prices at an artificial level, within a penny or two of each other. The scheme, which violates Michigan's antitrust law, was an attempt to increase profits from gasoline sales by eliminating competition in the Madison Heights area.
Schuette's office began the investigation after a tip from another gas staton owner revealed that he was pressured to participate in the price-fixing operation. The investigation showed that the stations all set their prices in relation to each other on five occasions last February and March.
Michigan's Antitrust Reform Act (MARA) prohibits price-fixing agreements because they undermine competitive market forces and casue artificially higher prices for consumers.
Here are the gas stations that pleaded guilty in the 6th Circuit Court to violating Michigan's Antitrust Act:
Marathon Supergas Inc. (Formerly charged as Dequindre Oil Co.at Dequindre Road near I-696) pleaded guilty to three counts. Station manager Farouk Ali Harajili pleaded no contest to one count of violating the Michigan Antitrust Reform Act. The station was fined $50,000.
Citgo Durga Lakeshmi Inc. (11 Mile and Dequindre, Madison Heights) pleaded guilty to three counts of violating MARA and was fined $25,000. The station manager, Rengachari "Vijay" Vijayaraghavan, pleaded guilty to one count of attempted violation of MARA and was fined $10,000.
J and A Quick Stop (12 Mile and John R., Madison Heights), pleaded guilty to three counts of violating MARA and paid a $20,000 fine.
Sphinx Monster Oil (12 Mile and Dequindre, Madison Heights) pleaded guilty to three counts of violating the antitrust law. The resident agent/lease holder, Shady Mahm Abdelhamid also pleaded guilty to one count and was fined $50,000.
Sunoco Bombay Party Shoppe (11 Mile and John R., Madison Heights) pleaded guilty to three counts and Resident Agent Sam Mansour Shammami was fined $50,000.
Joy Yearout, a spokesperson for the Attorney General's office said they pleaded guilty in December and were sentenced in January and February. She added that she could not comment on others businesses that might also be under investigation.
As gasoline prices rise consumers are concerned and it's something that we're certainly watching closely. We take this very seriously," Yearout added.
Anyone with evidence of an actual price agreement among retailers, not just the fact that prices match in a particular area, are encouraged to contact Attorney General Bill Schuette's Consumer Protective Division. Outside of Michigan consumers with similar information and concerns should contact their state Attorney General's office.