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Surprise (not): It's the oil companies

It may not be possible to get angrier at oil companies, but perhaps this will help.

A top aide to Gov. Mike Easley said Monday afternoon that a big factor in the continuing gas shortage in Charlotte is that some of the oil companies will not let distributors purchase a full allotment of gas from the terminal in Charlotte.

State and local officials last week predicted that a large shipment of gasoline through the pipeline on Friday from the Gulf of Mexico to the gas terminal in Charlotte would help settle down the crisis.

"The tanks at the terminal in Charlotte have plenty of gas," said Alan Hirsch, Easley's policy director. "This large delivery came in as expected and still is coming in."

The oil companies typically allow distributors to buy the same amount they sold last month or more, if they'd like. In times of shortage, however, the companies can restrict distributors to, say, 90 percent or 80 percent of their allotment. Alan Hirsch, policy director for Gov. Mike Easley, said he was told at least one oil company was limiting distributors to 50 percent of their allotment.

"What they say is there's so much pent up demand that if they that if they put out the full allocation, they fear they'll run out before the next shipment," Hirsch said. "This is the concern of the companies: Not to run out too soon."

Hirsch said Easley's office has convinced some oil companies to open up their supplies in areas where there is no shortage, especially port cities that receive gasoline by tanker, such as Wilmington; Chesapeake, Va., and Charleston, S.C. Then he has to convince distributors to make the long haul to get the gas.

"We're trying to connect the distributors with the places where there is gas," Hirsch said." 

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Re: Surprise (not): It's the oil companies

Zackly. If you are lining up to buy gas then you are paying more than the price at the pump. A gallon of gas in Charlotte should be at least $5, probably $6 or even $7 to reflect the scarcity. Were it, there would be no lines, no distributors guessing, and the issue would resolve itself in a matter of days.

Re: Surprise (not): It's the oil companies

There wouldn't be this much "pent up demand" if retailers and distributors were allowed to price their product at market rates without fear of overzealous prosecutors accusing them of price gouging.

It's simple supply/demand pricing economics. Raise prices, demand goes down.

Except in Roy Cooper's economics, raise prices above some magical line he arbitrarily sets and you get subpoenaed.

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