Calling the threat by Attorney General Lisa Madigan to sue 18 gas station owners "a grandstand move," David Payne says there is much more to the story about alleged gasoline price gouging than has been reported.

Payne is the owner of Payne's Service Station in Thompsonville and is one of the station owners who agreed to donate $1,000 each to the American Red Cross to avoid being sued by Madigan, who claimed that price gouging took place in the days after Hurricane Katrina.

"The news that has been released so far, all of it from the attorney general's office, really has not done justice from the store owner's standpoint," Payne said. "The only point of view that the public has heard is the attorney general's and there's a lot more to this story."

Among the other Southern Illinois stations involved are AJ One Stop in Anna, Payne's Service Station in Thompsonville, Roc One Stop in Galatia, Russell Oil Co. in Rosiclare and Galatia, Citgo in Shawneetown and Gas for Less in Shawneetown.

Madigan's office sent letters right before Christmas and gave station owners until Jan. 5 to decide whether to make the donation or risk being sued. Prior to the deadline all 18 stations have agreed to settle. "Successful businesses are entitled to be profitable, but businesses must not take advantage of emergencies and increase their profits unfairly over their costs," Madigan said when making the announcement.

Payne said he finds it "frustrating" that nobody has explored the other side of this story.

"Basically, they (attorney general's office) make it sound like they have offered everybody a sweet deal to pay the $1,000 to make this go away," Payne said. "Nobody has pointed out that we have the paperwork, the documentation in black and white that shows exactly what we paid for our gas. We showed them exactly what we paid for that one load of gasoline, and we're talking about one load of gasoline here, which we received on the morning of Sept. 2, post Hurricane Katrina. We raised our prices on gas exactly to the penny what our distributor raised the price. We showed them the hard evidence and they ignored it."

Payne said his business is independently owned and said his gas was priced at $2.59 per gallon prior to Hurricane Katrina. He also said he only changes prices after he receives a load of gas.

"After the hurricane hit we were still selling gas for $2.59 a gallon and many places had already raised their prices before they got their next load of gas," Payne said. "I want to emphasize that we adjust our price up or down when we get a load of gas, period."

Payne gave a chronological rundown of the events that led to the allegation of price gouging. On Sept 1, he said, gas was priced at $2.59 per gallon and he was expecting a load of gas before his store closed at 11 p.m. He said his distributor couldn't give him an exact amount that gas was going up, but only that it was "going up a bunch." Payne said the gas did not arrive on Sept. 1 but before he closed for business that night he increased his price 40 cents per gallon to $2.99 in anticipation of the delivery the following morning.

Payne said he opened for business at 5:30 a.m. Sept. 2 and the gas arrived at 7:40 a.m. and it was then that he learned that instead of gas going up 40 cents the increase was actually $1 per gallon, so he increased his prices to $3.59 per gallon. He stressed again that his cost went up $1 and he raised his prices exactly the same.

"I don't see how that can be considered gouging," Payne said. "I didn't price my gas any differently than I ever do. I think the attorney general really misled the public in the way this was presented. It was never taken into consideration what the cost of our gas is in all of this. The people I talked with from the attorney general's office didn't even know that I received my gas from a distributor; they thought I got it straight from the terminal. These people didn't even know how the process works. They didn't realize that there was a middle person in the process."

Bob Bolanowski owns AJ One-Stop, another of the stores targeted for alleged price gouging, and three other convenience stores in the Anna area.

Bolanowski said he purchases gas on a commission basis with other oil companies.

"Basically, what I do is just match what the other stations are in town," Bolanowski said. "I'm the littlest guy in town and I've never, ever set the price myself. I'm the little guy and the major chains sell three times the gas I do, so I just follow their prices."

Bolanowski said at no time during the days before or after Hurricane Katrina was his gas priced any differently than the scores of other stations in his immediate area.

"It's incredible to me that they can say we were gouging when there's a convenience store on every corner and I'm located 15 miles from Cape Girardeau," Bolanowski said. "How can it be price gouging when you can drive down the road a half a block and buy gas for the same price? How are you holding people hostage when a dozen places in town are selling at the same price."

Bolanowski agreed with Payne that the attorney general targeted small, independent owners.

"It would be crazy to try and fight it, I even had an attorney tell me that," Bolanowski said. "I was also guaranteed by the attorney general's office that there was not going to be any negative press on this and then the next day it was splashed all over the newspapers like we were trying to take advantage of our customers and that's just not the case."

Payne said he paid close attention to gas prices during the time frame in question and finds it remarkable that only independently owned stations were targeted by Madigan.

"I think this was a grandstand move on the part of the attorney general," Payne said. "If you look, all 18 stations are small, independently owned businesses. They didn't get go after the large chain stores; it was all individually owned stores. While all that was going on with Hurricane Katrina, some of the chain stores with national names were raising their prices three times a day and we all know that they were not getting three loads of gas a day. They raised it according to the news about the hurricane and getting all the market could bear and people were still lined up at the pumps."

Madigan's office logged more than 2,000 complaints about the price increases, leading to a four-month investigation of stations statewide. The 18 stations were accused of charging prices that were unjustifiably high compared to what station owners paid wholesale. Under the terms of the settlement, station owners also agree to abide by Illinois price gouging rules in the future.

Madigan's office began probing rapid run-ups in gasoline prices after Katrina hit gas refineries along the Gulf Coast last summer, driving up the cost of fuel in some parts of the state to as much as $3.63 a gallon virtually overnight.

"When we're in an emergency situation, such as we were, retailers have the obligation not to increase their prices to the general public over what wholesalers are charging them," said Deborah Hagan, chief of the attorney general's consumer protection division. "In an emergency situation, they shouldn't take advantage of that situation in order to increase their margins."

When asked why he agreed to donate the $1,000 instead of fighting the allegations, Payne said his decision was not based on an admission of wrongdoing but rather a matter of economics.

"They will not send letters to the major chains demanding $1,000 because they know they have lawyers on retainer that will fight it," said Payne. "They single out the individual business owners and that's the key point that's been missed here. They know that I'm not going to go out and hire an attorney and fight this for maybe a year in court just to prove my point, even though I've got the documentation in black and white that can prove my point. I'm not going to go out and spend $5,000 or $10,000 to prove a point."

- The Associated Press contributed information to this story.

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