Jackson gas station accused of price gouging in wake of Hurricane Ike

The Missouri Attorney General's Office is investigating Jackson Bait and Tackle for price gouging in the wake of Hurricane Ike, but its manager claims an increase in prices was necessary to safeguard the business from running out of gasoline.

The station faces a fine of $8,000 and additional penalties imposed by a lawsuit from the attorney general's office.

In a letter dated March 11, Attorney General Senior Counsel Stewart Freilich said that between Aug. 15 and Sept. 10, 2008, the price of unleaded gasoline at the station was $3.56 and substantially increased to $4.09 on Sept. 11 and remained at $3.99 from Sept. 13 to 17. The letter stated that the station's profit margin substantially increased from an average of 13 cents a gallon between Aug. 15 and Sept. 10 to 64 cents per gallon on Sept. 11 to 12 and 54 cents a gallon from Sept. 13 to 17.

However, in a copy of a letter dated March 25 that was addressed to Freilich and sent to the Southeast Missourian, Peter Fahey with Remo 1 LLC - the New York-based company that owns Jackson Bait and Tackle - said that "your interpretation of the information we sent you is wrong and to request money in return for dropping the issue smacks of blackmail and extortion." Fahey - who told the Southeast Missourian via phone that he preferred not to comment further on the matter - said the station "raised the price to meet the market and keep our gas for future sales so that we would not run out.

"That's what was going on. No grand scheme to get rich from Hurricane Ike."

A spokesperson with the Missouri Attorney General's office said the office would not comment on an ongoing investigation.

Look for more on this story later in the day at semissourian.com and in Saturday's edition of the Southeast Missourian.