Sunday, November 4, 2012

Fast Gas, No Lines:The Black Market to the Rescue

While New York and New Jersey governors have instituted laws preventing gas stations from raising prices to market levels, mini-Marc Rich types have taken to the streets to get the gas for very willing buyers, who are sick and tired of waiting in lines because of shortages caused by the dynamic duo of Christie and Cuomo.


  1. So despite Christie and Cuomo making price gouging illegal, people are still selling 2 1/2 gallon cans of gas for $50. And I'm sure there are some people who are willing to pay that rather than wait for hours in line (and still possibly not get gas in the event the station runs out).

    Now if price-gouging were legal, people would try to capitalize on an opportunity to make money and they'd (very likely) figure out a way to bring in gas to areas that had shortages. If it were very profitable, other people would also (again, very likely) figure out a way as well. That would increase the supply, thus decreasing cost to the consumer. I would imagine that the supply would be such that people could get 2 1/2 gallon cans for far less than $50.

    In other words, the free market (if unimpeded) would've taken care of this by itself much better than the government's anti-gouging laws are doing.

    One last point, the anti-gouging laws keep prices down but if people have to wait for 6 hours to get gas then isn't that a cost as well? In other words, doesn't time have a value? So waiting 6 hours for regularly priced gas probably costs you a lot more than paying free market prices would've.

    But hey, it's good politics to say you're "protecting the consumer".

  2. Anon -

    "One last point, the anti-gouging laws keep prices down but if people have to wait for 6 hours to get gas then isn't that a cost as well? In other words, doesn't time have a value?"


    The state decrees that prices must remain constant, but if you have to sit in line for 6 hours to get the product then the cost to you is higher than the cash price.

  3. Ridiculous, some of us have to get to work. Gas at $20/gal would be unacceptable. The lines are ok and would not be an issue if the stations had gas generators. As a paramedic who was sent into the hurricane multiple times I would be unable to afford fuel at gouging prices. Even though I had to wait on line a few times it wasn't that bad.

    I don't have a house to go back to. The last thing I want is to have to worry about losing my savings through gas or losing my income from not being able to get to work. At $20 a gallon I might as well not even go to work for the week.

    Non-essential personnel should have been told to stay home for a week, not demanded to come in. Then nobody would need as much gas either.

    1. Your point about people who have no business being involved in cleanup needing to stay away is exactly right. Clogged roads, fuel that could've been used effectively instead of burned while idling, and thousands of individuals wasting their time away sitting in cars for several hours instead of working. What I'd be curious about is whether you stayed at a station for the duration of the storm, or traveled home/elsewhere - and why you would leave anyway, being emergency personnel.

      The cost of gas in a situation where supply is scarce creates an incentive to increase the supply. If the US has to acquire fuel at a higher cost than normal for military and emergency services, it will - it's a simple fact that getting limited supplies to a difficult area requires greater resources, and therefore costs more.

      If I had a 50 gallon drum of gas, there would have to be an incentive for me to share it. Who would give up the capability to keep the generator running for heat in near-freezing temperatures?

      High prices attract people who get things done. They solve supply-line issues and provide whatever is in demand, in this case gasoline. As more of these individuals set up shop, the price drops due to competition and a rising availability of supply. The $20/g rates probably would've been around for a day or two, and there most likely would've been a more consistent supply.

      There's more to prices than what people see at the checkout, yet the majority of them have little awareness of the extent and operation of supply chains. Think about how the fuel gets to your ambulance, beyond your participation of swiping the gas card you don't pay for, and filling the tank with diesel you didn't obtain yourself.

      Be warned: once you go down the rabbit hole, there's no turning back.

    2. Of course, at $20 a gallon, more "non-essential" people would stay home, thus lowering the demand, and the price.

      The $20 a gallon gas would accomplish keeping non-essential people home without the use of force.

    3. And, at $20/gal the incentive for people to truck in gas from far away would have dropped the price faster.

      The market works, if the fools in DC (or Albany) will let it.