The looming Gas Shortage

[Brwn_eyes0511]

From Neal's Nuze:
http://boortz.com/nuze/index.html

GAS CRISIS II

Here it comes all over again....another looming gas crisis, potentially due to Hurricane Rita. Florida Governor Jeb Bush is warning that panic buying over the hurricane is going to restrict supply and cause a shortage. He's right, but unfortunately, ignorance about supply and demand and demagoguery about price gouging will be the order of the day.

There are more refineries and refining capacity potentially in the path of Rita than was with Katrina. If those refineries are hit, the supply of gasoline in the United States will be reduced. On top of that, people will start buying more gas than they otherwise would, further tightening supplies. Because of a lack of supply, the price will go up. But the price won't go up enough. Because they're worried about being prosecuted by opportunistic politicians eager to cash in people's ignorance about capitalism, gas stations will hold the price artificially low.

The result: there will be a shortage. Think about the following: say gas is currently $2.73 a gallon in your neighborhood for the cheap stuff. You see a news story on TV about Hurricane Rita and you run out and fill up all 3 of your cars, your RV and even the lawnmower. Everyone does the same, causing the station to run out of gas. People who desperately need gas to get to work get the shaft.

But would you have hoarded all of that gasoline had it been $3.73 a gallon? Nope. Proving once again that supply and demand works every time it's tried. Just don't bother telling that to politicians.

edit: I will say it again: price gouging due to supply hoarding is justified. You can't share, then the gas station mom will make sure that you will share.