When Supply and Demand Are Legislated….
Allen November 1st, 2005
In a quick-to-expire story, Yahoo reports that Katrina a Factor in Wash. Gas-Tax Revolt.
That is not so much of interest to me as a related paragraph:
Also in September, Hawaii’s wholesale gas prices were tied by state law to those of select mainland markets, an attempt to save island motorists from unfair prices at the pump.
Of course, you hear the same sounds as to how the US is going to start regulating the price of drugs that the pharma companies charge. Or how we will start importing drugs (which will have the same effect).
Unspoken in all of this is how this will drive down the supply of gas in Hawaii.
Put yourself in the shoes of a gasoline supplier in Hawaii and a mainland market. You can sell your gas for $2.67 (just picking a number at random) in both Washington (a state at random) and Hawaii. However, extra transportation costs, etc works out so that your cost of gas (as the supplier) is $2.50 for Washington or $2.60 for Hawaii.
Where would you want to sell your gas?
Me too.
What’s the Hawaiian word for "long queues at the gas pumps?" Sociawannamyway?
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