Gas is one of the products that the United States of America government has for a long time controlled resulting in both positive and negative consequences. The effect of price control in Gas was greatly felt in 1970’s when Nixon then the President of U.S.A imposed a price ceiling on crude oil and gasoline where gas station owners were not allowed to sell past the legal maximum prices of about $1.00 per gallon (Devadiga, 2016).
This control had unpleasant effect as gasoline became scarce and customers were charged in a first come first serve basis. The price control became untenable, and President Carter relaxed most of the price control to make gas more available. The waiver on price-control came with other issues as it led to inflation of oil product prices that industries dependent on oil passed the extra cost to the consumers. It led to the increase in the cost of living that resulted in unrest by works as they demanded to be cushion by the government in the cost of living by raising their wages and as a result, the American economy suffered a massive recession in 1979 (Devadiga, 2016).
The consequences of the price control provided the government with a valuable lesson, and as a result, President Reagan abolished the price control on gas and oil products in 1981(Platt, 2002). The products price was left to the free market to control where the principle of demand and supply was the primary factor that influenced the availability and cost of oil.
In recent times the price of oil has mainly been affected by market forces rather than interference by the government through price controlsReferencesDevadiga, A. (2016).
Price Control on Gasoline in the U.S. (1970s) – Logos. Logos. Retrieved 30October 2017, from http://logos.nationalinterest.in/2016/05/price-control-on-gasoline-in-the-u-s-1970s/Platt, H. D. (2002).
The first junk bond: a story of corporate boom and bust. Beard Books.Thaler, R. (2012). Gas Prices Are Out of Any Presidents Control. Nytimes.com. Retrieved 30October 2017, from http://www.nytimes.com/2012/04/01/business/gas-prices-are-out-of-any-presidents-control.html