In the days surrounding the impact of Hurricane Ike, gasoline usage is touching new records. The three biggest complaints are coming in the form of higher than normal price for gas, to gas stations running out of gas, to complaints of gas price gouging. A good percentage of people in the southeast United States affected by the impact of Ike complained about rising gas prices Friday and Saturday. Likely a higher number of complaints were due to people not being able to find any gas. Continuing the trend, the state of Florida alone, as of 5pm Sunday, there were close to 550 complaints of gas price gouging which has the state attorney’s office already issuing subpoenas.
Why is this happening? Well the region off the coast of Texas that was hit by Hurricane Ike is where the United States holds about 25 percent of its oil refining capacity. Over a dozen refineries were already shut down prior to the storm. Those refineries were shutdown and the supply at the wholesale level has been being affected. That caused a rush of consumers to get to gas stations as prices, rose to over $1 a gallon in some places, amid fears the storm would harm fuel supplies.
So as the supply has been affected and widely reported that an ensuing rise may be to come, a lot of the driving public wanted to get what they could while it was still reasonable, and that led to many gas stations running out. Some of the stations who weren’t out had their prices as high as $5.50 per gallon at a Tallahassee station, which fueled the hundreds of complaints of gouging.
According to Florida law, price gouging on essential commodities, including gasoline, is prohibited during a declared state of emergency. The state of emergency for Hurricane Ike was issued by Governor Crist on September 5, 2008. Price gouging is an unjustified increase in the price of a commodity compared to the average price for the 30 days prior to the declaration of a state emergency. The statute does permit businesses to pass along cost increases to consumers if those increases can be justified due to higher purchase prices, etc.
It’s essentially a domino affect. Once causes one, which causes another one. All of which could have likely been avoided when you look at the contrast of the gas prices compared to the cost of oil on an international market which has dropped to under $100 a barrel. Gas is available, stations just don’t want to pay the price for it.
Not for nothin’, but it looks like the media successfully achieved in scaring the public this time around. I didn’t want to believe it until I saw it for myself. From Saturday evening to Sunday morning, I visited five gas stations that were out, a half-dozen more I saw with prices inching close to $5 a gallon. The thing is, even though Florida is in a state of emergency, there’s no emergency. The state fuel supply is not being affected by Ike. The temporary increase is due to demand, and not a lack of supply.
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