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By Robert Rapier on Jul 9, 2007 with no responses

When Governments Dictate Gas Prices

This is what can happen:

Queues resurface as Zimbabwe runs out of fuel

APA-Harare (Zimbabwe) Long fuel queues have resurfaced in Zimbabwe as filling stations ran out of petrol following a government directive to reduce prices by up to 60 percent, APA observed here.

Only few filling stations in the capital, Harare, had fuel Sunday, resulting in long queues by desperate motorists.

The government Thursday ordered oil companies to slash prices of petrol and diesel to 55 000 Zimdollars (or 46 US cents) and 60 000 Zimdollars (or 50 US cents), respectively, as part of a campaign to contain inflation.

Before Friday, a litre of petrol cost 150 000 dollars while diesel went for 160 000 dollars.

The shortages are expected to worsen during the coming week after current supplies run out, fuel attendants warned Sunday.

We don’t know when we will get the next supplies because it is no longer viable to continue importing at the new prices,” said an attendant at a Harare filling station.

There is a lesson there for the U.S. government. If you think it is a good idea for Americans to use a lot more gasoline, then by all means pass legislation to discourage price increases. Not only will you help to increase greenhouse gas emissions, but you can also watch the havoc unfold as the gas stations run dry because they weren’t allowed to manage their supplies by raising prices.