October 11, 2005

Price Gouging?

Post Katrina gas prices maybe went up 10-15% depending on where you lived and in most cases they have rolled back down. Nevertheless, cries of price gouging were rampant and continue. But that is gas. If it is some other good like, say, oysters then it is a feel good story:

With two-thirds of Louisiana oyster beds wiped out by the Aug. 29 storm, prices of Pacific oysters have soared as Gulf Coast processors scour for alternatives thousands of miles away. That's allowed Taylor Shellfish to raise its prices 38 percent in the past month to $40 per gallon of oysters.

"It's the strongest demand that I've ever seen for oysters," says William Taylor, ......

Prices have surged as much as 50 percent since the hurricane, according to the Pacific Coast Shellfish Growers Association, giving the Northwest growers some relief, even as they sympathize with the hurricane victims 2,000 miles away.

Imagine the outcry if gasoline prices had gone up 50%!

Seems like so-called market forces working the way they should in both cases. It can, though, be a bit hard to tell if the market is really working in the extensively regulated and subsidized oil and gasoline business.

Posted by Steve on October 11, 2005

In general terms, I'm going to agree. Americans have become completely spoiled when it comes to gas and oil prices, particularly when you consider that many places in Europse have long been used to paying well over 5 dollars (American) for gas. There is certainly a place for supply and demand. When the demand for something remains constant or increases and the supply diminishes, prices rise naturally. That's good for everyone in the long run because consumers will judge their use more carefully and only buy what they can afford.

With that said, I think there is a difference between shellfish and *some* forms of energy. Shellfish have a very short shelf life. Oysters not sold in a few days are trash. When they run out, very shortly there just won't be any oysters coming from that source. When there's less gas, the supply side prices should rise and the increase will be passed on to the consumer. But when a disaster happens and retail outlets immediately raise their prices a staggering level while still selling from a large supply which they purchased at pre-increase prices, and then fail to lower them after the shortage ends until they've sold all of the product they purchased at the higher price, *that* is gouging and should be looked into.

Posted by Jazz at October 11, 2005 1:16 PM
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