Overlawyered: Chronicling The High Cost Of Our Legal System

Were Gasoline Prices Too Low in 2002?

I’m delighted, and honored, that Wally Olson has invited me to guest blog at Overlawyered. ………………….. I’ll write a few posts on the recent rise in gasoline prices. I begin, though, with a remembrance. In early 2002 I testified twice before two committees of the Virginia legislature. The solons of this Great State were considering […]

I’m delighted, and honored, that Wally Olson has invited me to guest blog at Overlawyered.
…………………..

I’ll write a few posts on the recent rise in gasoline prices. I begin, though, with a remembrance.

In early 2002 I testified twice before two committees of the Virginia legislature. The solons of this Great State were considering legislation aimed at keeping the price of gasoline from being too low.

The specific concern was that two regional convenience-store chains (Sheetz, and Wawa) charged prices at their pumps that were unfairly low – so low that mom and pop gasoline retailers of brands such as Exxon, Texaco, and Shell were on the verge of being put out of business.

Of course, the argument included the prediction that once the helpless likes of ExxonMobil, Texaco, and Shell were run from the State, Sheetz and Wawa would share monopoly power over gasoline retailing in Virginia. The only way to avoid this awful outcome, said the mom’n’pops, was for the legislature to prohibit unfair price cutting by gasoline retailers.

Fortunately, sanity prevailed. Virginia’s legislature refused to outlaw gasoline price-cutting. But they did seriously consider doing so.

I relate this story to put the current gasoline-price hysteria in perspective. For most of the past 20 years, whenever Uncle Sam wasn’t at war in the Persian Gulf, the price of gasoline hasn’t been terribly high. A mere four years ago Virginia and several other east-coast states actually took seriously the argument that these prices might be too low.

Things have changed…. and in ways that provide abundant fuel for future blog-posts!

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2 Comments

  • Surely you mean the ‘solons of the Commonwealth of Virginia?

  • In 1974 I had the honor of hearing a Texas A&M Economics professor, a Phil Gramm, later Senator from Texas, tell how the Federal government has only ever successfully done two things about prices.
    1. Freeze prices and create shortages.
    2. Support prices and create surpluses.