Repercussions for people outside New Orleans

Jay Honeck wrote:
The price of refined fuel has gone up because of the laws of supply and
demand - there is extra demand as people try to hoard, and restricted
supply because refineries are offline. It's just the free market you're
so enthusiastic about operating in its normal manner.

Anyone who thinks this is the "Free Market" at work clearly hasn't looked
closely at the issues.

Jay. I'm as big a right-winger as anybody here, but you're talking
candyland stuff here.

Let's say you're a gas station in Atlanta and your supplier just told
you, "that gas in your tanks is all you're going to have for the next
15 days," and you normally get a delivery every 3 days. What do you do?
You jack the price up.

If you have to drive to New Orleans to look for your family, you'll pay
the $6/gallon and bitch, but at least you could buy gas. At $3/gal,
everybody will come and fill their tanks and leave them parked in their
driveways. Meanwhile, every station has run dry "just in case."
Meanwhile the guys who *need* a tank of gas can't get it at any price.
At $6/gal, you leave your tank half-full and decide whether you really
need to drive. This is exactly the free market at work, allocating
supply to the people who want (need) it the most.

Yes, in the very short term, prices shoot up when supply is diminished.
However, between regulation and taxation, there is practically nothing
"free" about the oil/gas market, from supply, through refining, to end-user
sales.

The only twig of truth you have to stand on here is OPEC, and they're
not really a factor at this point. No one's witholding significant
supply right now. As for shipping, refining, and sales, it's about as
free a market as you can get. There are environmental regs on refining
but they are far from decisive. One of the main reasons we haven't
built new refineries is that it's more economically efficient to
upgrade an existing one where you don't have to build everything from
scratch, not to mention not needing double the amount of labor to
operate it.

And what is regulated about end-user sales? That market is so
competitive that most gas stations sell the stuff at break-even if not
a slight loss. They make money on milk and Marlboros.

-cwk.