A Montgomery County state delegate has released a survey of the state's gasoline stations showing that 28 out of 100 were overcharging during January by an average of 1.3 cents a gallon in violation of federal price regualtions.
Del. Luiz Simmons (R-Montgomery) used his survey today to support a charge that Maryland gasoline stations have been under-audited by government officials, in part due to what he said was the laxity of Gov. Harry Hughes.
Simmons' staff visited 100 stations around the state between Jan. 11 and Jan. 20, and found the 28 stations charging from .1 to 7 cents a gallon over ceilings set by the federal Department of Energy. Based on these figures, the study estimates that gasoline stations in Maryland are overcharging motorists at a rate of more than $7 million a year.
Under federal law there is no limit on the price that gasoline companies may charge for their products. However, retail stations are limited to a profit margin of 16.1 cents a gallon. It was this margin that Simmons' study showed the stations exceeding.
Area gasoline station dealers disputed Simmons' study yesterday, however, and said that overcharges by retail stations occur only when station managers do not keep up with fluctuations in the wholesale price of gasoline.
Simmons said the overcharges could be corrected with a more aggressive auditing program by state government. He said Maryland ranks in the bottom third of states in numbers of price audits conducted by the Department of Energy, and added that Hughes had contributed to the problem by refusing an offer from DOE last spring to relegate the auditing authority to the state.
Simmons is introducing a resolution into the legislature asking Hughes to obtain the auditing authority from DOE and to order retail gasoline station audits by state authority. However, the resolution would be nonbinding on the governor if it were passed and Hughes' aides say he is unlikely to change his position on station audits.
The governor feels that it is the federal government's responsibility to conduct the audit and the state is not equipped to do it," said Hughes spokesman Gene Oishi. "He is not the only governor who feels that way. Most governors have also taken this stance."
Meanwhile, Vic Rasheed, the executive director of the Greater Washington-Maryland Service Stations Association, today disputed the accuracy of Simmons' study.
Rasheed said that "Simmons had no way of knowing what the legal price was on the days he went to those stations, because the prices have been changing as many as three times a week.
"There have been a good number of audits that have been done in Maryland by DOE," Rasheed said, "and most of our stations are not violating regulations except when there are minor oversights. Many dealers are downright ashamed about their prices and what we need is a little bit of tolerance and understanding."
Simmons responded that his study of the stations had been "extremely conservative," and that his staff had used the gasoline price current at the time they visited the stations, even if the price had changed hours before and the stations had not received gasoline under the new prices.
Simmons charged that "Rasheed loses all credibility as a spokesman when he tries to refute this, because a few months ago he said that violations would not be happening anymore. This is obviously a widespread problem."
Simmons said he hopes his survey also will influence an expected House of Delegates vote this week on a bill that would require service stations to display their highest and lowest prices on signs. The measure, which is designed to increase price competition among gasoline stations, was approved by the House Economic Matters Committee last week.
Simmons' study included stations around the state. However, Simmons said today, most of the violators were found in Prince George's County, Baltimore City and Montgomery County.
The survey included stations selling gasoline from Exxon, Mobil, Shell, Sunoco, Gulf, Arco and Amoco.