In the wake of the devastation wrought by Hurricane Sandy, there has been a predictable debate over whether the storm was somehow caused by climate change (for a good summary of the case against this idea, see Roger Pielke here). But while Sandy itself may not have been a manmade disaster, the aftermath of the storm is shaping up to be one. Widespread shortages of gasoline have led to gas lines stretching in some cases for miles:

Many stations don’t have power to pump gas. Those with power are pumping fuel until they run out.

Although some refineries remain shut down, they still have fuel in storage. But trucks are having trouble making it to the stations because roads remain blocked by trees and flooding.

Additionally, there are more cars on the road since many bus and train lines remain suspended. 

Risalvato said none of his clients are gouging.

“There’s nobody rationing. When a retailer has gas, he’s pumping until he has no more.”

Two separate people we talked to today, who otherwise have power, said that gasoline was their main concern, in part because it’s fueling generators.

 In a crisis situation, some degree of shortage may be unavoidable. But New Jersey’s gas problem is exacerbated by state laws prohibiting so-called “price gouging.” “Gouging” of course has a negative ring to it. But when the supply of a product decreases while demand goes up, higher prices are the natural result. Higher prices are a signal to producers to bring more gas into the New Jersey and help reduce demand among those whose need for gasoline is less urgent. As Matt Yglesias puts it:

If it were possible to earn windfall profits by transporting gasoline into the affected areas, then human ingenuity would be finding ways to do it. But if you restrict retailers to earning merely ordinary profits, then people won’t take extraordinary measure to increase supply.

Bans on price gouging short-circuits this natural market response, making the shortage both more severe and longer lasting. If New Jersey is interested in minimizing the human suffering resulting from the hurricane, it needs to stop threatening prosecution for those who provide needed supplies at market prices.