Last week’s gasoline shortage demonstrated just how little that we as a society understand about basic economics.
First, let’s do a little bit of a rewind. Last week, Russian hackers broke into Colonial Pipelines’ digital infrastructure and installed ransomware that decimated the company’s ability to control where gas was going, if anywhere. Colonial paid the $5 million dollar ransom to regain control of their systems.
Colonial Pipeline controls most of the auto fuel distribution for the Southeast. Following this attack, the hardest hit states were North Carolina and Virginia, both of which suffered widespread gas shortages.
Being that the Eastern Panhandle is right on the border with Virginia, folks in Jefferson county witnessed firsthand a little bit of this madness at the pump.
You didn’t really see any gas stations raising their prices much beyond $3 a gallon, but you did see people showing up with the pump with gigantic tanks to fill up, in addition to their cars. It was short-lived, but some gas stations were actually running out of fuel around here.
I was reminded of what we as a nation went through in the aftermath of Hurricane Katrina nearly two decades ago when that disaster destroyed New Orleans and shut down countless refining operations in the Gulf of Mexico.
Which leads me to the question: What’s worse? Not having any gas available to purchase? Or paying an extra dollar or two a gallon?
Hurricane Katrina is an important event to remember because of the national outrage that arose over seeing some gas stations raise their prices to six and seven dollars a gallon.
State leaders and attorneys general all over the country sprung into action, threatening legal action against these greedy shop owners for price gouging. In fact, state leaders all over passed laws preventing this kind of behavior from shop owners.
Despite what politicians want us to believe, we cannot escape the consequences of a free market.
It’s easy to take a business owner to court for price gouging, but are they going to prosecute a hoarder the same way?
Make no mistake, there is no real shortage of gasoline in this country. We’re only facing distribution problems that are likely to start to ease by the end of this week.
But what about the next emergency with gasoline? It’s not out of the question.
Due to Covid, there’s a shortage of truck drivers qualified to haul gasoline. Many of those drivers retired during the shutdowns last year. The training required to become certified to haul gasoline is quite extensive due to the explosive nature of the freight. It’s a workforce that won’t be easily replaced.
Have the last two weeks been a sneak preview of what we have in store?
What’s next? Will we limit people to how many gallons they can purchase? Or even better, maybe the government will tell people they can only fill up on certain days of the week based on their license plate numbers.
It just seems to me that the real answer is to let the free market take care of these issues on its own.
Any time a product becomes scarce, the price always rises. And when the scarcity of the product eases, the price goes back down. Regardless of what politicians do, there are always consequences.
In our leaders’ efforts to protect us from gouging, they have left us vulnerable to the hoarders.
On the surface of things it seems that higher prices only help the business owner.
But higher prices also make it difficult for hoarders to drain the fuel supply for the rest of us. They actually encourage people to just purchase what they actually need, and they do a much better job of it than a public service announcement.
It would stink to see four and five dollar a gallon gasoline. I’m not a fan of that.
But even worse is pulling up to a gas station without any gas.