economics, hurricanes, oil, supply and demand

Fear of shortage triggers run on gas
oil, economics, supply and demand, hurricanes

September 13, 2008, Steve Reeves

With Hurricane Ike bearing down on the Texas coast and its numerous oil platforms and refineries, the fear of shortages sent gasoline prices soaring in Tuscaloosa and around the South on Friday.

In Tuscaloosa, motorists raced to fill their tanks as the price of a gallon of regular gas rocketed above $4, and rumors spread that it would climb even higher.

Amid widespread complaints of price-gouging, Gov. Bob Riley declared a state of emergency for Alabama late Friday afternoon, triggering a state law that prohibits ‘unconscionable pricing.’ In issuing the declaration, Riley cited the likelihood that damage caused by Ike will lead to an energy shortage.

In some parts of the state, prices climbed above $5 a gallon and some stations placed plastic bags over pump nozzles, indicating they were out of fuel.

University of Alabama professor Peter Clark, an expert in oil and gas pricing, said suppliers and store owners are to blame for the spike in prices, not the oil companies.