Even with the higher prices, [CITGO station owner Bipin] Ganhdi ran out of gas by mid-afternoon Friday. He is hoping his next shipment will come Friday night, and he has no idea what it will cost when it gets to his pumps.
He goes on to note a suggestion from AAA:
If you have more than a quarter of a tank of gas, then don’t rush to fill up.
Wait 24 to 48 hours and see what Ike does when it finally makes it to land and the oil refineries
That’s sage advice from AAA, but such advice wouldn’t be needed if price mechanisms were allowed to work freely in North Carolina. Unfortunately, the Governor of the Tar Heel State is trying to wish-away those market forces. The Associated Press reports that:
Gov. Mike Easley has declared a state of “abnormal market disruption” and signed an order allowing the attorney general to enforce North Carolina’s anti-gouging law.
Going on to explain the governor’s economic thinking:
Easley said wholesale prices were up less than 20 cents a gallon and consumers shouldn’t see prices rise substantially more than the wholesale increase.
Easley’s understanding of economics leaves something to be desired. Wholesale prices are, of course, just one component of the price of gas. Certainly local spikes in demand play a part, and that’s not a bad thing.
No AAA warnings would be needed if prices were allowed to rise, keeping everyone but those who absolutely need gasoline from consuming the gasoline that may be hard to come by in the next few days. If prices stay high, it sends a clear message to suppliers to get gas to the Carolinas, where there is money to be made.
Unfortunately for the people of North Carolina their governor missed a few economics classes in school and believes that price controls are the way to go. I hope North Carolinians realize that cheap gas isn’t so great when all the pumps have run dry.