Hawaii Caps Wholesale Gas Prices
They believe -- erroneously methinks -- that this action will help tame prices at the pump. California is considering following suit. Do our economically-minded Schmoliticians know if this is a similar governmental pattern to what happened in the Carter years, and which led to widespread inflation and gas shortages?
For the record, I paid $2.89/gallon in the middle of nowhere, Virginia today. Gas prices are hurting people like me, who drive often / long distances.
posted by Sean @ 9/01/2005 03:59:00 AM
2 comments
2 Comments:
I had thought, and I have no expertise here at all, that the shortages in the late '70s were a result of oil producing countries, especially the Middle East, literally not selling us enough, rather than a response to price caps. Randy? A little Gas History here?
Sorry I've been absent; gouging takes a tremendous amount of time & management (kidding).
The #1 bottleneck in east coast fuel supply is a lack of electricity to power the pipeline that moves gasoline from the Gulf through the South to New York.
As of this morning, the pipeline is around 50% operational. Once it is fully operational, however, there might not be much to put into it. There are still 10 or so refineries down, so we could drain the SPR's, but we still couldn't refine the oil into gasoline effectively.
(This is the price we pay for not building refineries in 30 years, and putting them all in generally geographically concentrated places. Barbara Boxer can educate me about NIMBYism later.)
Gasoline shortages are a reality for the next week. The underlying supplier market is popping wildly, explaining the dramatic daily price changes.
Responding to the 'Hawaii' plan, I would suggest that they could find themselves quickly out of gas. A retail or wholesale cap would quickly move up the economy of the supply chain at which point a seller would have to chose between selling gasoline to Hawaii for less or somewhere else for more. Hawaii would lose.
The simple fact is that fossil fuel is relatively scarce and its demand is increasing.
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