It was a case of good intentions producing spectacularly bad results.
Back-to-back hurricanes Ike and Gustav struck the Gulf Coast in September 2008, shutting down 15 oil refineries in Texas and Louisiana that supplied virtually all of metro Atlanta’s gasoline. Crude oil prices shot up from $91 to $104 a barrel in just three days. To keep retail gas prices from spiraling out of control, then-Gov. Sonny Perdue issued an executive order on Sept. 12 activating Georgia’s anti-price-gouging statute.
The law dictated that gas stations had to show they were making the same profit with elevated prices as they were before. As one state official described it, if a gallon of gas cost $1 and you sold it for $2, you had a $1 profit; if after price controls took effect the same gallon cost $2, you could charge no more than $3.
The governor’s action was intended to keep a lid on gas prices. The average price for a gallon of unleaded peaked at $4.16, then the all-time high, on Sept. 15.
But the move also resulted in long lines, frustrated motorists and, reportedly, fistfights at the pump as gas stations across the region ran out.
With prices artificially capped, there was no incentive for the public to conserve already pressed gas supplies; to put it another way, there was no disincentive to make people cut back on their driving. Worse, as word spread by TV, radio and nascent social media that some stations were starting to run out, motorists panicked and hit the streets, buying up whatever gas they could still find and exacerbating the situation.
It took about a month for supplies in the region to fully return to normal.
And statute or no statute, more than 1,400 drivers filed complaints about price-gouging. The state subpoenaed the records of 130 stations to determine if they illegally jacked up prices. Officials said they had received reports of gas as high as $9.99 for a gallon of regular, compared with a national average of about $3.50 at the time.
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