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Wednesday, August 31, 2005

Doing The Wrong Thing

You might wake up tomorrow to what seems like price gouging at your local gas station. Today, as people waited in lines in New Jersey to purchase gas, the tall signs along the road were updated. As much as $.20 increases intraday, and Tuesday night into Wednesday there had been another +$.20. State laws requiring that the gas stations along the New Jersey Turnpike and Garden State Parkway (which advertise their prices on satellite signs along the busy highways) change their prices only once a week on Thursday evening into Friday morning, have been bucked.

Today and tonight those prices will be changed: as much as $.50 to $1.00 higher, some rumor mongers are reporting.

Wholesalers are cutting back on supply; in effect, they are rationing. As a result, almost the entire country could see increases of $.50 tomorrow morning. Common speculation among station owners is that gas will be over $4.00 within 7 days.

As Mark Levin said tonight on his program, it is important not to panic. Very few things cause panics, and one of them is panicking. Prices are reacting rather stably. Sellers are foreseeing tightened supply in coming weeks and are adjusting in advance. Perhaps things will get better when reserves are pumped into the supply line on Thursday, although some are saying electricity outages will prevent SPR from having significant effects right away.

“Panic” is the wrong thing to do.

What is the right thing to do? In the short term, cut back on consumption. For the medium term, all eyes drift toward Alaska.

Posted on August 31, 2005 08:11 PM. Permalink