Michael Giberson
One consequence of a 14-week project to replace several locks on dams on the Columbia and Snake rivers is that gasoline transportation costs will rise in the area. Some gasoline that would have traveled up the river will have to move by train and truck instead, a more expensive process and one much more exposed to potential winter weather. Gasoline prices are likely to rise, so what should consumers do about it?
According to a news report, the state of Washington is advising:
Drive less.
In a document on the fuel supply outlook during the closure, the No. 1 way the fuel shortage will be dealt with is “through reduced demand due to higher prices.”
“We’re going to have to see how it works,” said Mark Anderson, an energy analyst with the state Department of Commerce. “There may be some rough times.”
State officials are warning there could be gas shortages in Eastern Washington during the closure — especially if bad weather hits. Drivers are warned to keep gas tanks full and consider ways to cut down on driving. Officials also are discouraging people from topping off their tanks, as it could cause longer lines at gas stations.
So let’s get this straight, drivers should keep gas tanks full but not top off their tank? The only way I can see to do that is to fill it up and then park it – I guess that is consistent with the “cut down on driving” suggestion.
The Tri-City Herald said, “Normally, 1.47 million gallons of fuel are shipped from Portland to the Port of Pasco every day for delivery around Eastern Washington,” and this it the fuel that will have to take alternate routes during the renovations. River traffic is subject to annual interruptions for planned maintenance, but typically just for three weeks at a time. (Fun research project idea: see if you can find evidence of price effects in Eastern Washington due to the annual maintenance breaks.)
More information on gasoline markets in Washington.
Gasoline price gouging addendum: According to the news article, the Washington Office of the Attorney General said, “High prices due to low supply and high demand is not price gouging. Unconscionable pricing that bears no connection to circumstances is price gouging. High prices won’t get us moving. Unconscionable prices will.” Reportedly “consumers receive some redress in 60 percent of the complaints filed” with the Attorney General’s consumer protection office. These claims surprised me because, (a) Washington doesn’t have a specific anti-price gouging law, and (b) states with price gouging laws can receive hundreds or even thousands of price complaints, but typically only a handful become grounds for an investigation and fewer still lead to some sort of settlement.
Apparently the legal authority is the state Consumer Protection Act, which among other things: “Unfair methods of competition and unfair or deceptive acts or practices in the conduct of any trade or commerce are hereby declared unlawful.” Awfully vague – I wonder whether the law has been enforced in price gouging circumstances.