Why I knew there was no gas station closing... but bought gas anyway..

I heard people at work today talking about the rumor that gas stations would be shutting down at 4pm and knew it was false. The government wouldn't cause a panic by making gas stations close, and gas stations wouldn't voluntarily close down if they have gas to sell.

Nevertheless, I got gas. There were two reasons for this. The first is that my gas gauge is broken, so I don't know how much gas I have. The other reason was that I figured if enough people believed the rumor, there really would be no gas left and I wouldn't have anywhere to buy gas from.

So I bought 6.5 gallons of BP Premium for $3.61 a gallon (they were out of regular). $24 for half a tank of gas, making me sound like an old man longing nostagically for the heady days of 1999, when I could fill the tank of my LeBaron for $10.

Many people on the 'net and in the meatspace are annoyed by high prices of gas, and are complaining of "price gouging" by gas stations. I think it's just supply and demand - the Katrina events have reduced the supply of gas, and people responding to rumors, plus traveling for Labor Day and moving into colleges, have increased the demand for gas.

And I'm kind of glad gas prices are high and that the government isn't cracking down- and not because I'm some kind of rabid environmentalist who thinks everyone should ride a bike to work. High prices are often the best way of distributing a scarce resource is through higher prices. It gives people who are at the margins - who really don't need to drive - an incentive not to, and lets those who do need to drive be able to buy gas to.

Sound crazy? Think of it this way - you are driving, and you are nearly out of gas in your car - you don't have enough to get home. Would you rather live in a world where you can buy gas, but it's $5 a gallon, or a world where there is no gas available, because there is a shortage and price controls, and gas stations can only charge $2 a gallon - and thus there are no gas stations with gas left, because every gas station has either run out (selling gas to people who didn't really need it) or because gas stations aren't bothering to replenish their stock because they lose money on it.