Dollars and Jens
Sunday, September 28, 2008
Two articles in the Atlanta Journal-Constitution:
  1. Q&A about gasoline shortages in northern Georgia.
    Q: Why does it seem that there’s more of a shortage now than after Hurricane Katrina?

    A: The stockpiles of gasoline and other products are lower now than after Hurricane Katrina. So current shutdowns are mainly due to power outages in the areas where there are refineries. The good news is they’re starting to come back online. Production will be restored faster than it was after Katrina and Rita because the refineries weren’t damaged as badly. As of Friday, only four of 56 Gulf Coast refineries remain closed.
    Well, there's another pretty salient reason, too:
  2. A rather jarringly oblivious article about the state's price gouging laws.
    However, state officials are getting fewer complaints about gas gouging than they did after Hurricane Katrina three years ago.

    “I think part of that may well be that the stations are much more attuned to the price-gouging laws than they were before Katrina,” Cloud said. “It sunk in with enough people that we don’t go away on this.”

    The agency learned a lot from the aftermath of Hurricane Katrina in 2005, when there was a run on gas because of fears of fuel shortages.

    Cloud’s office received 6,000 price-gouging complaints, including reports of jacked-up hotel rates and gas prices.

    In the end, Consumer Affairs wound up getting settlements in 83 cases. The next highest state for gas gouging settlements was New York, which had 14.
    Which would suggest why Georgia is particularly hard hit by stations running out of gas:
    He delayed buying gas in the hopes of finding cheaper fuel in Georgia. After crossing into the state from Tennessee, he couldn’t find an open station.

    “I went back to Chattanooga and filled up there,” he said.
Before I saw this last article, I wondered whether, aside from fear of a "price gouging" law, retailers might simply fear social opprobrium from raising prices temporarily more than from running out of gas. I wondered whether it might make sense for the state to fix gas prices at $5 a gallon for a couple weeks — not that I'd have any real hope of politicians doing that. In any case, this looks less like market failure than like government failure at this point.


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