Gas Stations

Laws Against Price Gouging Won't Fix the Long Lines at the Gas Station

Don't punish businesses for raising prices during a crisis.

|

A cyber-attack on the company that operates one of the country's most important fuel pipelines has temporarily crippled the supply of gasoline and jet fuel to much of the East Coast, causing prices at the pump to rise by several cents in most of the affected states. More increases could be on the way as some gas stations have run out of fuel amid a craze of panic-buying.

Predictably, the crisis has already sent some federal and state authorities into a tizzy about so-called "price gouging" at the pump. During a press conference on Tuesday, Energy Secretary Jennifer Granholm issued a stern warning to gas station owners who might dare to raise their prices in response to changing market conditions.

"We expect that gas station owners are and should act responsibly," she said. But here's the thing: oftentimes raising prices during a crisis is the responsible thing to do.

When prices shoot up during a shortage, Duke University political scientist Michael Munger told Reason last year as politicians panicked over coronavirus-induced supply problems, one of the first things that happens is "consumers buy less."

"They look at that price and they say, 'You know, somebody else must need this more than I do,' and so they leave some for the person behind them," says Munger.

When you throw basic economics out the window, you end up with panicked consumers trying to buy up as much of the supply as they can. Which looks something like this:

And this:

Too often—and especially during times of crisis—politicians don't seem to understand that prices are a source of information for the public, rather than some arbitrary figure dreamed up by greedy businessmen. Disrupting the flow of that information doesn't help.

Criminalizing that flow of information is worse, but that's exactly what South Carolina has done. Alan Wilson, the state's attorney general, issued an emergency order Tuesday that anyone found selling gasoline for "an unconscionable price" could face fines of up to $1,000 or 30 days in jail.

Probably the best (so far) illustration of how basic economics completely befuddles politicians comes from North Carolina Gov. Roy Cooper (D), who dropped this golden nugget of advice yesterday.

If only there was a way to discourage people from rushing to top off their tanks. Perhaps allowing companies to make it more expensive to do so would do the trick.

NEXT: Corporations Are Getting Rich off Government Aid

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Raising prices when demand goes up and supply goes down is unfair!!!!@11!!1

    It’s… UNFAYER!~!!ONE1!!1`1

    1. EISTAU Gree-Vance! It’s your cue!

      1. Ahem….. (thank you, Econ).

        Everything Is So Terrible And Unfair! ™

        It’s good to be recognized for all my hard work. Even if sarcasmic did try to appropriate my culture. But I did miss this one 3 days ago, so I’m glad someone picked up the slack. I was too busy working in misery for the corporate pigs, which is of course…….

        So Terrible And Unfair! Haha.

        1. D’oh! I meant Enco. How rude.

  2. Lessons never learned.

  3. “let’s say it’s a cyberattack … and on a pipeline this time”

    1. “Them dang Rooskies hacked our pipeline, but don’t worry, everything will be fine by the weekend.”

      Of course, the people staying this are almost the same exact group of dickheads who said that lockdowns and mask mandates would only be needed for like two weeks in order to “flatten the curve”, so I’m not too resssured.

      1. Friday’s film @White House was the new Without Remorse

  4. Can an Attorney General issue emergency orders? It isn’t like they are the CDC.

    1. We’re going to find out!

      1. How does that work I’m Canada? Where you’re from.

    2. Next re-org ‘for efficiency’ will be to merge DHS, FBI, CIA, and CDC into the Department of Running the Lives of Citizens.

      I propose a constitutional amendment to eliminate all federal agencies that use initials.

    3. They can do whatever the fuck they want to do because they’ve realized they face no consequences from The People

      1. And look how the media crucified a bunch of idiots who dared trespass at the capitol. Better not dissent, or all the leftist fags here will call it an attempt to overthrow the government.

  5. Funny thing, in my part of Florida, gas prices have gone down by two cents a gallon.

    And oh by the way, during the oil embargo in the seventies, there were NO unusual lines until the federal government implemented price controls.

    1. That’s because Florida is not fed by the pipeline that was affected. That means Florida (and the rest of the country that is not the NorthEast) has a slight over-supply – which, yes, will slightly depress prices.

      1. Not entirely true.
        Prices in my town are up .10 this week, and apparently at least one gas station has run out of non premium.
        Haven’t seen unusual lines yet though.

        1. PRICE GOUGING!

  6. You know what might help? More pipelines.

    1. It’s kind of scary that there is no independent backup pipe. I guess these things happen infrequently enough that it wasn’t cost effective.

      1. Yes, government does tend to make these sorta things cost prohibitive.

      2. Especially when you have democrats infesting the civil service.

    2. Yes! Don’t stop with Keysone or ANWR! Drill, Baby, Drill in the Appalachians if it has oil! I told my landlord once years ago if he wanted to put a rig in the back yard, he had my blessing! As an added bonus, it will bring us closer to the grand opening of Six Flags Over Mecca and Medina!

      1. I would absolutely do all of those things, except the 6 Flags thing.

        But, that wasn’t my point.

        This crisis has been exacerbated by the fact that much of the East Coast basically had a single point of failure in their gas delivery infrastructure. More diversity and redundancy would have helped to avert much of the damage here.

        1. Think of the environmental benefits!

        2. OK, we could put A Whole New Disney World at Mecca and Medina.

          Either Disney or Six Flags is much better than the petrol-powered Religion of Pieces Necromongers who seek to convert or kill every human on this Planet.

          And pipelines are of little use without sources of Black Gold and the more the merrier.

      2. How nice of you to grant sovereignty of the property to your landlord!

        See, we really can all get along.

  7. Boy, I would hate to be the head of IT at Colonial Pipeline right now. I’d be doing my resume. But shit, what do you say?

    “I’m the jack-ass IT professional who failed to keep our IT systems up to date to guard against ransomware, and managed to shut off half the flow of fuel for the East Coast in one fell swoop. I’m that guy. Wouldn’t you like to hire me to do the same for you?”

    Can you imagine this person right now? Must be like a leper.

    1. These kind of companies don’t actually have an IT department. They might outsource an integration and then let it ride.

      1. Well I will be sure to let Ms. Kohlar and Mr. Dunbar know their jobs are safe, because they outsourced integration and let it ride. Heh, heh.

        https://www.colpipe.com/about-us/our-company/executive-team

      2. Fact check!

    2. If they get let go they can go back to their former job as IT security specialist for electronic voting machines.

    3. It’s some guys in India.

    4. It’s just marketing:

      “Battle hardened IT security professional now available to supervise your company’s network. In these perilous times, you can’t afford to have your company’s critical infrastructure managed by someone who hasn’t seen the worst kinds of attacks first-hand.”

  8. “Long Lines at the Gas Station”?

    That sounds like the type of problem middle to lower class people would worry about. Why are we even talking about this on a site dedicated to serving the interests of billionaires?

    By the only metric we Koch / Reason libertarians care about, the Biden Administration is already a smashing success.

    #InDefenseOfBillionaires

    1. Your hero is losing his ass in the market today.

      1. Even with billionaire-friendly Democrats in charge, I never claimed Mr. Koch would post gains every single day. I’m concerned with weekly, monthly, and even yearly progress.

        #InItForTheLongHaul

        1. You post his gains daily!

          1. No gain, no pain.

  9. Ten comments and nobody’s blaming Reason and everyone else who didn’t vote for Trump for directly causing this?

    What’s happening to these comments?

    They’re becoming……. civilized….

    1. Yeah, it’s almost like the mute button … works. The outrage monsters are going somewhere else for their daily dose.

      I will admit I was skeptical that the mute button would do more than minimally help against the spam-bots. I’m glad to be proven wrong.

    2. Strawmen aside, yeah, not lying about the more libertarian candidate and re-electing someone physically and mentally stronger would help right now. It’s karma given the timing on blocking Keystone XL, kowtowing to Iran and the PA, etc.

      1. Mencken said that the job of the parties in a two party system, like we have, is for each party to convince voters that the other party is evil.

        It works because they’re both right.

        A lesser of two evils is still evil. If it wasn’t this bullshit from Biden it’d have been some other bullshit from Trump. Different flavor, but still bullshit. Still evil.

        That’s why I stopped voting.

        1. So we got what self-important pieces of shit like you deserve.

        2. sarcasmic, I think you should reconsider = That’s why I stopped voting.

          We are not governed by angels, but by imperfect men (and women). To me, you vote for the candidate who is closest to your personal philosophy, without consideration for party affiliation. The reason you vote is to affirm your belief in our way of government, and our way of life. That is really what it comes down to.

          Be an active citizen.

          1. When there is someone I can vote for, I will. But I’m done voting against the worst smelling turd.

            1. Well now have a communist flavored turd. Big improvement.

          2. idk, i can respect sarcasmic’s choice. I don’t particularly believe in our way of government, it’s proven itself incompetent pretty much every step of the way – it’s just the alternatives all seem to be worse. I vote, but I certainly don’t feel like my vote makes a difference.

        3. I’m cynical too, but not that jaded. Someone is going to rule over us and I can settle for less worse.

          I’d rather a bunch of people be offended by mean tweets and trannies not getting taxpayer funded expedited requests on joining the 41% in exchange for the fundamental understanding that the government shouldn’t have much to do with the economy and that we are in a modern dark ages where strong men succeed and weak men die.

          1. Republicans or Democrats, who’s gonna bankrupt us first?!?

            Dahari or vomiting, which will dehydrate me first?!?

            That’s how I see it.

            1. I base that decision on who interferes with private life the most. We’re all fundamentally libertarian here and if we all agree on one thing, it’s that the government does not and will not produce the solutions to today’s problems.

              Both parties use state powers inappropriately, but all the rules and regulations that affect my life were signed by Ds. That might change as I get older and become exposed to new rules.

        4. Are you not voting like you’re not commenting here?

        5. If you really have no preference between less evil and more evil, and I really don’t know what to say about you except thank God you weren’t voting

      2. Back in the Eighties, The U.S. Geological Survey knew the North American Continental Shelf had oil, shale, and coal to last for centuries and Uranium to last indefinitely. We could have been energy independent long before and without Trump or any of the current bumper-crop of assholes.

    3. “Ten comments and nobody’s blaming Reason and everyone else who didn’t vote for Trump for directly causing this?
      […]
      They’re becoming……. civilized….”

      Except for stawmen and whining…

  10. A cyber-attack on the company that operates one of the country’s most important fuel pipelines has temporarily crippled the supply of gasoline and jet fuel to much of the East Coast

    As long as this madness is relegated to the East Coast, it won’t even get me up in the morning.

  11. Empty gas stations, rising crime, rising inflation, a general sense of malaise and stagnation… all we need is for an embassy to get taken hostage for over a year and for disco to make a comeback and Jimmy Carter’s long-delayed second term will be complete!

    1. ^Gold!

    2. The Saudi oil embargo, closing the gold window, and runaway inflation including the Whip Inflation Now buttons were all in place during the Nixon/Ford administrations.

      But since you suck GOP dick for fun I wouldn’t expect you to say that.

      1. And Carter sure fixed all that, didn’t he, you lying pile of lefty shit? And nobody cares about your erotic fantasies.
        Fuck off and die.

        1. Look! Over there Sevo! There is a GOP cock that hasn’t been sucked yet!

          Get busy!

          1. Nobody cares about your erotic fantasies, kiddy-diddling piece of lefty shit.

          2. We will hold off, since you got there first.

          3. You’re licking Carter’s ass now? How libertarianish of you.

    3. Modern music sucks so bad that we don’t need disco to make a comeback.

      1. Disco would be an *improvement*.

        1. You sure about that? I give you Sarah Brightman, the early years:

          The Adventures Of The Love Crusader

    4. ‘America is Back!’ Thanks, Joe

  12. Pipelines are bad. Uncle Biden told me so.

    1. When did you wake him up?

      1. ^Gold!

  13. BUILD BACK BETTER!!!
    The swamp’s back baby!

  14. On his watch, President Ford’s 1975 auto standards took effect in 1978, raising new domestic cars’ efficiency 7.6 mpg during 1977–85. They drove 1 percent fewer miles on 20 percent fewer gallons, and became lighter, cleaner, safer, but scarcely smaller and no less peppy, saving fuel even when 55-mph top speed limits were abandoned 13 years later. New federal and state policies also made buildings and factories more frugal. Appliance efficiency standards passed Congress without a single nay vote.

    The results were stunning. During 1977–85, the U.S. economy grew 27 percent , oil use fell 17 percent , oil imports fell 50 percent , and imports from the Persian Gulf fell 87 percent; they’d have reached zero in 1986 had President Reagan not reversed the policy. Oil burned per dollar of GDP fell by 35 percent in eight years, or an average of 5.2 percent per year—enough to displace a Persian Gulf’s worth of net imports every two and a half years. (See related pictures: “Oil States. Are They Stable? Why it Matters.”)

    https://www.nationalgeographic.com/environment/article/the-arab-oil-embargo-a-crisis-that-saved-us

    1. Correlation =/= causation, he explained to the lying pile of lefty shit.

    2. If we mandate electric cars, everyone will be rich!

      1. Or if we borrow another 6 trillion from our kids!

    3. Buttplug still probably thinks the lira is valuable too.

    4. But Reagan’s tax cuts don’t deserve a mention, or the millions of man years lost to the 55 mph limit.

  15. “A cyber-attack on the company that operates one of the country’s most important fuel pipelines has temporarily crippled the supply of gasoline and jet fuel to much of the East Coast,..”

    Does this grant “emergency” powers to tin-pot dictators like Newsom and Cuomo? “Temporary” like the lock downs?

  16. Just filled up for $47 at the only station around here that still has gas-it also happens to be the most expensive, and they only had premium. Of course, all the cheaper ones where I usually get gas were the first to sell out, if the government had ordered a price ceiling, I would probably be out of luck

    1. That Attorney General should turn his sights on California. I passed stations selling regular for $4.37 a gallon on the north 5.

  17. No gas lines in NC, no gas either.

  18. You know, folks, without energy sources to run automobiles and generators, no one can go spend “get-paid-to-exist” checks and no delivery services and food trucks can run and no IT can run either. Yet the Demoncats are still pre-occupied with UBI and Stimulus, Repubes are still fixated on so-called Big Tech and Rigged Elections, and Libertarians still harp about pot, Mexicans and butt-sex. Priorities, anyone?

Please to post comments

Comments are closed.