Gas Lines, Gouging, and Hurricane Sandy: Keeping Prices Low Means Nobody Gets Fuel

Brooklyn, NY—It was mayhem yesterday afternoon at the Hess Gas Station at 4th Avenue and Union Street, where drivers waited in line for more than six hours to fill up their tanks. A separate line of customers on foot wrapped around the block inching red gas canisters up the sidewalk. The police were on the scene bringing justice to the line cutters.

Brandon Shamell, who transports handicapped customers for Countrywide, Inc., was standing off to the side observing the scene. "We're not going to be able to pick people up on Monday," says Shamell. "Gas is more important than food right now."

Lillian Rodriguez, who owns Family Car Service, spent the day in line in a battle to keep her drivers on the road. "I've been here since 6:43 [in the morning], making the line over and over again. And I will do that for as long as I can."

So why does it look 1973 all over again at gas stations throughout New York and New Jersey? Hurricane Sandy knocked power out to New Jersey's gas refineries, causing shortages throughout the region. Govs. Chris Christie and Andrew Cuomo responded by doing exactly the wrong thing: They threatened to prosecute any station owners caught raising prices, thus removing any incentive to truck more gas in from other parts of the country.

Thanks to a cadre of small businessmen, though, Brooklyn residents have an alternative to spending all day in line. One man, who asked to remain anonymous, said that he was waiting in line over and over again and then selling gas across the street from the station at a 200 percent mark-up. "A lot of people honestly don't want to wait three hours, you know? It's happening at every gas station." He estimated that about half the people in line were in the resale business.

Recently at Reason.com, Anthony Randazzo made the case for price gouging to a skeptical cabbie, Katherine Mangu-Ward explained why "surge pricing" in taxis helps provide a crucial service to a "storm-weary populace," and Nick Gillespie outlined "3 Stupid Responses to Hurricane Sandy—and Every Other Disaster You Can Remember." 

About 1.45 minutes.

Produced by Jim Epstein, who also narrates.

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