This past Thursday - September 22nd, 2005 - saw a panic among the public here in Southern Ontario, with lines snaking out of every gas station. An onslaught of customers that continued until the tanks were empty. Major roadways were clogged with parked cars, and commuting became even worse than it normally is. It was, quite honestly, an embarrassment.

The root of the problem was largely fictitious hearsay, coupled with a couple of isolated, price-gouging gas outlets. "They're selling it for $3.00 a liter in <insert some remote town>!" people would eagerly relay. I heard this hearsay, coming from a person who heard-it-from-a-person, from five separate people that day, each time with a different town hosting the unconfirmed harbinger of pricing doom (and of course the first clue that something was amiss was the origins of the pricing myth - it was always some remote town. Do remote towns have a more integrated communication network, and thus can respond to market details or pricing information more quickly than in the city? Of course not, and the opposite is generally the case, yet here were people all rushing in droves to the local gas outlet selling gas for $0.99, thinking that they were taking advantage of it before the station operator got wise to the inside information that only they, and the thousands around them, knew). 

The worst culprit of all was the media: CHUM FM, a major radio station in this area, seemed to be commenting on the mythical hike in the price of gas every half an hour - not only the entertainment disc jockeys, but even the news reporters. Not once did I hear them actually confirm, or refute, these rumors. Given the importance and presumed responsibility required of media in that sort of case, I found this absolutely deplorable. They were, of course, just playing along with the theme of the major outlets like CNN, which have been stoking the gas pricing fears to manufacture news, pulling out every halfwit commentator they can find to tell the audience that "if the hurricane hits the refineries and if it does considerable damage and if...then gas prices could go up". A hurricane killing and damaging isn't news enough, so the gas-price angle is being exploited to the max. Were hurricanes just invented this year or something? I'd swear I heard of prior art...

Of course the public is more vulnerable to this sort of message now, given the spike to $1.50/liter here in the wake of hurricane Katrina, so people just accepted it and instantly started relaying it, making their own plans to fill up their car, boat, van, and lawnmowers. Soon the rush was on to buy more fuel in a day than is normally bought in a week, and tanks were emptied, which fuels panic even more. Ridiculous.

I think there are two lessons (among many others) that can be learned from this situation:

• Those few stations that did hike their prices, some to $1.75 or so, to exploit the situation, should be punished severely by consumers. Let me make it clear - I don't think those gas station owners were evil or immoral, and honestly I think there is a lot of logic to their actions (if people are going to line up and eagerly pay $1.75, then why not charge it?), but I'm thinking in terms of consumers and our ability to enact a consumer democracy through our wallets to avoid this in the future: If your local gas station exploited the panic, never, ever buy gas or anything else there again. There are a lot of alternatives for most consumers. Of course I know that no one would bother with this sort of behaviour, immediately falling on the destructive "my vote doesn't make a difference" mentality.
• We really, really need monitoring and control (not central control of prices, but rather monitoring to ensure that it really is a competitive supply/demand industry without collusion, and that the market forces are rational) of gas prices. Gas is not like regular consumer goods, and is absolutely critical to our society. I've made a proposal for this before.

Ultimately I think we need to accept that as more of the world develops, without an increase in the ongoing supply of fuels, the price will simply continue to go up. That seems inevitable, and I'm sure in 5 years we'll look back at $2.00 a liter fondly. But we need to ensure that the shock is absorbed well and accommodated, and that nefarious agents aren't profiteering from panic.