by Dan Haley
3/7/2012

State inspectors are stepping up oversight at gas stations in Massachusetts to guard against potential price gouging.

The Office of Consumer Affairs and Business Regulation said Sunday it sent an alert to Division of Standards field inspectors to pay close attention to what it calls unusually high prices.

What nonsense. This isn't "consumer protection." It is political theater - the Patrick Administration posturing to fool you into thinking it cares about high gas prices and is trying to do something about them. Worse, it's a re-run of the same farce that plays out whenever gas prices spike. And the gullible press laps it up every time.
 

Nationwide, the average for a gallon of unleaded is $3.74. State officials say it’s $3.73 a gallon in Massachusetts.

Whoa! Loose the hounds! Our average gas price is an entire penny LESS than the- wait... what? It's less than... Well loose those hounds anyhow. Gotta be vigilant against the "potential" for price gouging.

Here's the best part of the Boston.com blurb:
 

Officials say inspectors will take a look at gas stations with prices that are significantly more than what’s charged at stations in the immediate vicinity.

See how ridiculous that is? Like any other retailer, gas sellers can be expected to 'charge what they can get' for their product. But the market controls. If a gas station charges "significantly more" than other stations that are, in fact, "in the immediate vicinity," then you know what happens to that over-priced gas station? It loses its customers to the lower-priced competition. This isn't exactly advanced econ here folks. "Price gouging" is what happens when a commodity is rare and in high demand - like when a ticket broker gets his hands on a few Superbowl tickets and re-sells them at ten times face. That isn't what is happening out there on the mean streets of Massachusetts.

If there were such a thing in the Bay State as a gas station in the middle of nowhere, with no alternative purveyor of unleaded for miles and miles around, then maybe we'd have the potential for "price gouging." Back here in the Commonwealth of the Real World, with Mobil, Citgo, Shell, Sunoco, Irving, Hess and many others competing in an open (and regulated) market? We aren't going to see "price gouging," no matter how high global prices climb. To the contrary, as prices increase it is the stations that manage to keep their per gallon a few cents below the competition that will succeed in a marketplace increasingly populated by price-conscious consumers.

None of which is to say that gas prices aren't painfully high and climbing, or that unscrupulous gas retailers do not sometimes play games with their pricing. But that isn't what this "gouging" nonsense - which some might call 'fear mongering' - is about.

The real head-slamming irony of the situation is that while it deploys "field inspectors" to create the illusion that it cares about the impact on consumers of high energy prices, in cases where it could actually help to drive down costs the Patrick Administration (like its ideological Big Brother in Washington) consistently does just the opposite - crafting and implementing policies, like Cape Wind, deliberately intended to increase the cost of energy in Massachusetts.

As it dispatches its legions of inspectors to protect us from a non-existent threat and issues its self-congratulatory press releases trumpeting their Potemkin inspections, it is hard to escape a familiar conclusion: the Patrick Administration thinks we are stupid.

By the way, this is the very same phenomenon, occurring for the very same reason, on the national level.