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Rants!

October 2001 Rant

"Gouging For Dollars"

I know you were just as stunned as I was when the events on the morning of September 11th unfolded before our eyes on TV. A lot of thoughts floated through my mind at that time and I'm sure you had a similar experience. I am willing to wager that none of those thoughts were about how to profit from the acts of terrorism.

That type of thought was running through the minds of those that sell gasoline for a living. Gasoline terminals that provide fuel to wholesalers jacked up prices just a few hours after the attacks on New York and Washington. In Virginia there were dozens of complaints filed with the Office of Consumer Affairs and the Attorney General's office. Virginia was lucky as prices only went up a few cents. The highest reported price was about $2 a gallon. But in the Midwest prices were reported to have increased to $4 to $6 per gallon.

By the next day, September 12th, the wholesale prices were back down to the same level they were earlier. While most gasoline retailers waited and did not raise prices, those that did raise prices looked foolish. The petroleum buyer for the parent company of East Coast, a company that did raise prices, told the Richmond paper "It was a mistake. I should have waited to see how it shook out for today."

Why did the gasoline terminals jack up prices when the cost of a barrel of crude had not changed? The one word answer is "e-mail". Panic e-mail was going to everyone in the gasoline industry right after the Twin Towers fell. These oil industry experts decided to believe a bunch of junk e-mail.

Did these oil experts believe a bunch of panic e-mail or did they just use that as an excuse to raise prices? They must have figured, as most did, that the terrorist attacks were somehow connected to the Middle East and to Americans the Middle East means oil reserves. Could these oil people have thought that oil supplies could have been in short supply in the future and they decided to jack up the price to turn a quick profit? Did they figure that travel would be curtailed after the attacks and therefore their profits would decrease so they decided to get all the money they could as soon as possible?

And those companies that did raise prices got to keep the extra money. Most states, including Virginia, cannot regulate prices of most items that are sold. Only the governor can do that and only in an emergency. The governor of Florida had to do just that because of price gouging. The gouging wasn't for gasoline but gouging on the price of US flags. The demand after 9/11 for flags led to the price gouging opportunity. I have heard that many NASCAR fans were angry because they could no longer bring coolers into the races. At the Dover track race fans were very upset over the new security measures. One man told me that he could have easily brought in a gun or a bomb as long as he didn't bring in a cooler. Beer sells for $4 a bottle at Dover. Food and other drinks are just as high. Many thought this was just another way to gouge people out of their money.

A person wrote this to the editor of the editorial page of the Richmond paper about the gasoline price gouging: "This is a despicable act, bordering on treason…The gas-station owners who saw this as an opportunity to make a quick buck are no better than the looters in Brooklyn who took advantage of the lack of police officers, who were busy attending to the rescue effort. I urge all Americans to recognize who these villains are, and to put them out of business".

It's up to you to decide if, as they claim, they fell for "panic" e-mail or if they just saw the terrorist attacks as an opportunity to make some quick extra cash…how American of them.

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