Texas House approves 20-cent tax break on gasoline through summer months…Marathon Petroleum faces price-gouging lawsuit in Kentucky; separate allegations of manipulating crude prices in late 2003…Administaff survey: firms positive about 2007 business conditions…
The Texas House has approved a 20-cent tax break on gasoline prices during the summer–to deal with higher fuel prices. The measure now moves to the Texas Senate. The price break is equal to the per-gallon tax Texas drivers pay when they fill up their tanks. So Texas would not collect that gasoline per-gallon tax for 90 days–in an effort to give drivers a break on the rising cost of the fuel.
Kentucky is suing Marathon Petroleum in a price-gouging investigation related to Hurricanes Katrina and Rita. The suit accuses the fuel supplier of violating price gouging laws after the deadly 2005 storms. Marathon is Kentucky’s largest wholesale supplier of gasoline and a wholly owned subsidiary of Houston-based Marathon. Attorney General Greg Stumbo claims Marathon overcharged Kentucky residents $86 million. The suit also alleges Speedway and SuperAmerica stores overcharged an additional $3 million. Marathon spokeswoman Angelia Graves denies the allegations and says the company has cooperated during the review. Graves also says Marathon employees worked around the clock to increase production.
Marathon Oil faces possible penalties for allegedly trying to manipulate crude oil prices. Marathon says federal regulators plan to recommend enforcement action against it, and that the company will “vigorously” defend itself against the government action. The company says it was notified by the Commodity Futures Trading Commission last month that regulators are prepared to allege that Marathon tried to manipulate crude prices in late 2003 by offering to sell crude at a price lower than other bids. The CFTC has been engaged in several investigations that energy companies manipulated oil and gas markets.
Nearly 86 percent of small business owners say their companies are growing as predicted, according to a Business Confidence Survey released by human resources services provider Administaff. Some respondents say their companies are growing at a faster pace than forecast at the beginning of the year. And 81 percent of the firms report being positive about business conditions for the remainder of 2007. Almost half of the 5,700 companies polled expect to hire more new employees this year than they added in 2006. Some 58 percent say the biggest issue they face is “hiring the right new employees.” Average compensation is up 6.6 percent and average commissions have increased 9.8 percent, compared to last year. Other issues cited by respondents include the cost of medical coverage, the high cost of fuel and regulatory compliance. Some are worried about employee retention and immigration issues.
The chief executive of Southwest Airlines says a slowing economy is dampening travel demand, which will make it tough for the discount carrier to achieve its earnings target for the year. Southwest Chief Executive Gary Kelly spoke at the Bear Stearns Global Transportation Conference. He said the long-standing 15-percent earnings-growth target remains in place for this year, but said the carrier may be forced to reevaluate targets for next year and beyond if the market continues to be sluggish. But executives of some competitors, including Delta Air Lines and Houston-based Continental Airlines said at the conference that passenger demand remains strong. They said they’ve cut domestic capacity and have been better able to match demand with supply than carriers that continue to grow.