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States warn gas stations against price gouging

COLUMBIA, S.C. - Drivers around the South rushed to fill their gas tanks Friday as prices skyrocketed after Gulf Coast refineries shut down in preparation for Hurricane Ike. One regional chain urged patrons to limit themselves to 10 gallons and officials in some states tried to head off a run on gas by threatening to prosecute stations that gouge consumers.

'We are encouraging motorists to exercise some restraint this weekend,' said AAA Carolinas spokeswoman Carol Gifford. 'The run on gas is creating a crisis before there is a crisis.'

Customers in western North Carolina reported gas selling for $5.99 a gallon and frustrated drivers tried to find low prices.

'I just feel these oil companies can pretty well do whatever they want to do,' said C.K. Baker, 55, of Louisville, Ky., as he bought gas at a suburban station.

As refineries closed, governors in North Carolina, Kentucky, Arkansas and Georgia signed orders or made declarations allowing their attorneys general to enforce anti-gouging laws. Officials in Mississippi said they would require merchants to justify questionable increases.

In South Carolina - where gas prices increased about 20 cents a gallon on average Friday - Attorney General Henry McMaster said gas stations that price gouge would face criminal prosecution. He said each case would be investigated separately to see whether prices were raised to an 'unconscionable' level.

Michael Fields, executive director of the South Carolina Petroleum Marketers Association, said retailers and wholesalers also faced higher prices and limits on how much gas they will get. With the announcement of the price-gouging rules, his group was urging members to keep good records.

South Carolina resident Rosa Bailey rushed to a Shell station to fill her family's truck with $3.79 regular Friday morning after her husband called to warn her that prices might rise.

'We had a smaller car before this, and we got used to putting $10 in it and being able to drive a ways,' she said. 'Not any more.'

The Pantry convenience store chain, which has about 1,600 stations in 11 southern states, asked customers at about half of them to buy only 10 gallons of gas at a time. Similar requests were made during hurricanes Rita and Katrina to slow panic buying, CEO Pete Sodini said. The chain's stores include Kangaroo and Petro Express.

In Mount Pleasant, S.C., an Exxon station had run out of regular gas Friday morning, despite a sign limiting motorists to 10 gallons. Down the street at a Sunoco, regular gas sold for $3.71 a gallon.

John McGillicuddy, 67, visiting from Ann Arbor, Mich., said there would be enough gas to get back home, but he would likely pay more for it.

'Every time there is a storm or some little thing the world markets go crazy and it's nothing people like me or you can have any influence on,' said McGillicuddy, a physician. 'I don't know if it's speculators, but we're speculators, aren't we? We're all worried the price is going to go up so everyone is here buying gas today.'

Exxon Mobil Corp., Valero Energy Corp., ConocoPhillips and Marathon Oil Co. were among the companies that stopped refinery operations on the Texas coast, primarily in the Houston area. The area accounts for about 20 percent of U.S. refining capacity.

North Carolina Republican Congressman Robin Hayes called for a federal investigation into some prices rising more than $1 per gallon in a day.

'I understand there is a substantial hurricane in a sensitive area of the country, but this dramatic spike in gas prices is breathtaking,' he said.