2008-09-30

Gas tank logic

The observation that panic buying is making the gas shortage worse does not make logical sense. The Athens Banner-Herald is buying that argument today. The argument is that motorists are "topping off" their tanks at every opportunity for fear that they will not be able to get gas again soon and so this early buying makes gas stations empty out sooner. Panic buying explained the beginning of this shortage when people rushed to buy gas for fear of rising prices and short supplies, so that first weekend brought an artificial shortage. But the argument does not make sense beyond that initial surge.

First of all, a lot of motorists are not "topping off" their tanks. The news has brought us stories of people running out of gas, motorists that ran out while in line at a gas station or while actually driving on the highway. Those people have empty tanks, not half tanks. Second, it has become unlikely to completely fill a tank since many gas stations have set purchase limits, but filling a tank is what people normally do when they buy gas. Third, "topping off" tanks is normal behavior for a lot of motorists who never allow their tanks to go below one-half or one-quarter full.

Now where this argument really fails logically is that in light of this gas shortage motorists should have been making adjustments to their routines and cutting back driving. I have canceled plans for two weekends now because of this shortage and thereby saved a whole tank of gas. I imagine that many other people have done the same. Of course, the panic buying argument comes from credible sources such as the AAA and oil distributors, and it could be supported factually if it could be shown that fuel consumption has increased as a result of the panic, but I have not yet read such a claim. If people have done the smart thing and cut down their driving, then any "topping off" behavior cannot be blamed for accelerating consumption because motorists would already be far behind on their usual consumption. Sure, if we really could force everyone to wait longer before refueling, the supplies would be helped for two or three days, but then everyone would return to the gas stations trying to get full tanks and not just half tanks, and the shortage problems would continue just like before.

Again, we saw an artificial shortage around September 12 caused by panic buying that interrupted the usual fuel distribution cycle. But over two weeks later after motorists have reduced their driving and used less gas, I don't think that "topping off" our gas tanks is exacerbating our problem, and I have read no factual support for this argument. We would have to show that motorists on average have not cut back on driving, a fact I would be surprised to find. Any early purchases by "hoarders" being reported anecdotally should have been more than offset by the reduction in driving we would expect.

1 comment:

B said...

Your argument about demand may be correct. I suspect that the supply shortfall caused by the hurricanes overwhelmed the demand -- whether the demand increased, decreased, or stayed the same.