AAA Mid-Atlantic: 'Absolutely No Justification For Spike In Gas Prices'

http://woodbridge-va.patch.com/articles/aaa-mid-atlantic-absolutely-no-justification-for-spike-in-gas-prices

(snip)

According to John Townsend, the Manager of Public and Government Affairs for AAA Mid-Atlantic, gasoline distributors are blaming the flooding along the Mississippi River for their decision to hike gas prices. They fear that the flooding will further disrupt fuel supplies, but some experts believe that this is just an excuse.

"For the sake of motorists, we most certainly hope that price gouging is not taking place in our area,” said Townsend. “Although proving it is hard, such practices are illegal, unwarranted, and unconscionable. They must not be tolerated.”

A press release by AAA states that "the Oil Price Information Service (OPIS), which provides daily fuel price data to AAA, reports that the eleven flood-threatened refineries along the Mississippi River in the Baton Rouge/New Orleans region account for about 14 percent of the gasoline refined in the United States. However, those refineries are continuing to operate normally, and most of them do not anticipate any production disruption from the flooding."

While the current Virginia law against price gouging only protects consumers when the Governor or President has declared a state of emergency, Townsend advises motorists concerned about the possibility to call the Virginia Attorney General's office at 1-800-451-1525.

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Or are operators pricing significantly above their costs? Maybe it is a LIFO type pricing problem?

The oil companies look at the price of gasoline as an enormous ATM card and powerful political weapon.

remember that at least there were real shortages (whether naturally occuring or manufactured). This time around, we don't have to wait in line for hours to pay double for gas.

I guess that's an improvement. :sarcasm:

Clearly, the solution to the crack addiction is an unlimited supply of cheap crack.

That's comforting to know...

Wheeeeeeee!

Price gouging occurs when there is some sort of breakdown in the market, a market failure that is usually caused by some type of emergency. When price gouging laws are enforced they are (or at least should be) accompanied by some other form of rationing system to prevent hoarding.

What these station owners are doing is not gouging. It's simply a price signal that they are worried about potential shortages. Nothing wrong with this, IMHO.