Friday, September 09, 2005

Price Gouging in T-Town

To my knowledge, gas prices didn't hit the price in this picture (from San Diego, California, by the way), but they did get to $3.19 in the recent panic run-up. Quiktrip, seemingly is the local gasoline price setter. Make no mistake, I think Quiktrip is a great company and am glad it is here in Tulsa.

Prices have retreated somewhat, so our fears have temporarily waned. But the genie is out of the bottle and Katrina exposed our soft underbelly. The exposure has spawned a number of manifestations, one being outright price gouging. The national news reported that nationwide the average price of gas post-Katrina was $2.89. Why with refineries in West Tulsa, did the price here spike to $.30 above the national average? I can think of two main reasons.

One way is because of EPA ozone regulations, and Tulsa's propensity to exceed the EPA limits. Our city government in the past agreed to use a blended form of gasoline in the Tulsa area. This is a repeat of what is going on in the rest of the US. Kudo's to Engine of the Future for his insight and for this map that shows the areas effected. The EPA rules that govern this created shortage of blended gasoline have been suspended nationwide until September 15, 2005. That's far too short a time to do much good. I say suspend those rules until we have built an additional 10 refineries here in the USA. One result of the blended gas scenario has been artificial market pockets around the country with associated shortages and higher overall prices.

Another way is simply price gouging. This means that people make the conscious choice to raise prices to take advantage of a situation. And the price gouging is certainly not limited to gasoline. One local TV station reported the day after Katrina struck that in Tulsa Oklahoma the price of plywood went from $2.00 per sheet to $3.00 per sheet IN ONE DAY! Mind you, not one piece of plywood could have even been shipped to the affected area. In fact, it took the military several more days before they could get their specialized equipment into the area. No, this was pure and simply price gouging and those responsible should be punished, per the laws of our land. I think they should be made a public spectacle as well, but that's another story.

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