OMT One Man's Trash...from Norman Leahy

Thursday, March 02, 2006 :::

Price Gouging

Tucker Martin sent a press release touting the AG office's settlement of a "price gouging" case brought against a gas station in Centreville...which seems, post-Katrina, to have been charging $6 dollars a gallon for gas (for premium). This part of the release caught my eye:

The Office of the Attorney General and the Virginia Department of Agriculture and Consumer Services received several complaints from Virginia consumers concerning gasoline pricing. The court filing alleges that, by charging the following prices for gasoline on September 2, 2005: Regular ($4.799, $5.899), Mid-Grade ($4.899, $5.999), and Premium ($4.999, $5.999), Centreville Shell charged unconscionable prices for necessary goods during the disaster.

The key phrase: "unconscionable prices during the disaster."

I am unaware of the particulars of the case beyond what is in the release. But common sense says that during times of disaster or shortage, prices will rise to previously "unconscionable" levels. But I am not willing to place a great deal of faith in the government's ability to judge what constitutes an "unconscionable" price. Did the dealer in question take advantage of the situation? Possibly. But were there other matters -- like restricted supply or inordinate demand, that might also explain the price?

Maybe it's just the phrasing used that bothers me so much. Nah. It's the arrogance that a group of government officials somehow have the ability to determine proper price levels, plus their unwillingness to allow the marketplace to self-correct.

I also love the enforced philanthropy:

Finally, the settlement requires Centreville Shell to make a contribution of $1,000 to the American Red Cross Hurricane Katrina Relief Fund. This payment is in lieu of a payment of civil penalties.

They can determine prices and pick worthy charities (perhaps a carry-over from McDonnell's legislative days). Is there nothing an officious intermeddler can't do?

::: posted by Norman Leahy at 3/02/2006 0 comments


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