First, I am almost always an advocate of the market and market forces. Although it can be extremely brutal, it is also very efficient way of allocating resources.
However, this is a dire situation. Louisiana is home to 10% of the nation's refineries. Almost 100% of those resources are still offline. There are reports of gas lines in Georgia with some retailers charging $4.99 gallon. The pipeline that delivers oil to the East coast is still without power. I have seen no estimates of when that line will be up and running.
President Bush needs to call for an immediate and limited price cap on retail gas prices. This should be of very limited duration -- a month at the
most. The oil companies already have strong profits; they can take a small financial hit. They can claim they are acting in the national interest.
This situation can quickly spin out of control as people panic about the gas situation. Capping prices -- for a limited time -- would help to alleviate some of the public discontent.
It is imperative that people understand this is limited in duration. I don't like price caps. At the same time, this is also an emergency.