Is it price gouging? Or is it the free market reacting to extraordinary circumstances?
My name is Shabbir Safdar, and I’m a nearly unapologetic free marketer who doesn’t believe in price gouging. Imagine, just for a second, that you’re a gas station franchise owner, and your supplier tells you this may be the last shipment of gas they can guarantee. You can’t depend on a tanker to come fill you up every Tuesday anymore, because the hurricane has interrupted the regular flow of supply.
This is a problem. You’re an immigrant, this station is your livelihood and supports a household where six others in your family live. No gas means nobody buying sodas, sandwiches, or cigarettes, which is over half of the money you make in a given day. Yep, without gas, you’re screwed.
But you’ll still have to pay your rent. And you’ll still have to pay your franchise fee to the oil company whose sign you’ve got up front. And you’ll have all this packaged food that’s not going to sell because nobody is coming in to pay for gas.
What do you do if this is your last shipment for the forseeable future? You raise your prices. You charge a lot more per gallon. This may be the last money you make for a week or two.
And then you get called a ‘price gouger’.