Gasoline Rationing

The quality of reporting on economic events is low. For example, I cannot learn easily what role, if any, restrictions on price increases play in creating gasoline lines in New York City and Long Island. CNN just posted an article discussing recent requirement there that drivers buy gasoline on odd or even days depending the last digit on their license plate. (Letters are considered to be odd.) 

A quick scan of the internet shows that most accounts blame the lines on the inability of many stations to obtain gasoline or to operate because power shortages; jobbers cannot pump gasoline out of storage tanks and retailers' pump do not operate. A reduction in the number of stations open would increase the lines at the stations that remain open. However, I suspect that something more is going on. I wonder why firms do not increase price in the face of such long lines. Price increases would reduce the quantity demanded and increase the quantity supplied, thereby reducing the lines. If price increased sufficiently, the gas lines would disappear.

I cannot confirm that restrictions on increasing price are in place in New York and Long Island. New Jersey does have restrictions: "... stations cannot raise their prices by more than 10 percent above pre-Sandy prices under state law due to the current state of emergency" (http://www.cnbc.com/id/49642174). The CNN article contains some evidence that similar restrictions are in place in the city and Long Island. It states that the rationing will "help gas stations stay open longer." I don't think stations close early if they have gas to sell and a line of waiting customers. I do think they close early if they run out of gas because the price is artificially low.