Michigan Attorney General Bill Schuette has issued a warning that gasoline price gouging is illegal in Michigan as some oil production in the Gulf of Mexico could be shut down due to hurricane Isaac.
AAA Michigan said Monday that gasoline prices rose 3 cents during the previous week to a statewide average of about $3.93 per gallon ahead. That's about 14 cents a gallon more than a year earlier.
A sharp rise in gasoline prices is expected in the next few days and through the Labor Day weekend in Michigan, experts say.
"I expect stations to have increased prices as much as 10-35 cents per gallon by the conclusion of the weekend with some stations starting to raise prices immediately," said Patrick DeHaan, GasBuddy.com Senior Petroleum Analyst.
DeHaan warns that Tropical Storm Isaac, as well as murky regional refining issues boosted wholesale gasoline prices to their highest level so far this year, rising 7-cents per gallon higher than their previous peak back in March. Wholesale gasoline prices, which is the price stations pay for new shipments of gasoline, rose 35-cents per gallon yesterday, the largest one day increase in a year.
Prices in the Iron Mountain-Kingsford area rose from $3.96 per gallon Monday to $4.29 per gallon by Tuesday afternoon.
While this situation is a significant pinch for motorists, it is temporary.
"I expect the situation to slowly resolve itself over the next few weeks, but as gasoline prices tend to fall slowly, motorists may not have a sense of real relief until late-September," DeHaan said.
GasBuddy operates MichiganGasPrices.com and over 250 similar websites that track gasoline prices at over 140,000 gasoline stations in the United States and Canada.
Attorney General Schuette said in a release Tuesday that higher gas prices are likely, but circumstances "are not a free pass for price gouging."
The Consumer Protection Act prohibits retailers from charging a price that is grossly in excess of the price at which similar property or services are sold. Anti-trust laws also prohibit gas stations from entering into agreements to fix prices.