Fuel Rationing is Not Advisable

22 August 2005 - The recent announcement of the government to consider fuel rationing in the face of high oil prices is an ill-advised move. The current problem is one of high prices and not of supply shortages. Rationing may only encourage panic-buying as people are misled into thinking that there may be shortages of supply. Rationing programs also have the potential to generate other, new issues like designating who will be assigned to allocate the rations and what mechanisms will be used to ensure fair and equitable distribution. The last time fuel rationing was resorted to in the Martial Law period, the program had to be withdrawn quickly because ration coupons were counterfeited within weeks of the program’s start.

We are concerned that rationing programs may lead to a greater potential for corrupt practices. For instance, we are concerned about the possibility of a black-market for oil resulting from the rationing. There will be those who will get their rations even if they do not need them in order to sell oil at a higher price to those who have need for greater quantities of oil. This underground economy will deprive the government of tax revenues.

The more rational approach to this problem is to promote energy conservation programs among people. Such programs can include more judicious use of motor vehicles, car-pooling, scheduling of electricity use, the use of more energy and power-efficient production methods, and other known energy conservation methods. Consumers eventually need to make their own choices of how much and when to consume fuel and power without a loss of productivity on their part. Moreover, the high cost of oil will itself cause consumers to discipline their consumption of fuel and power.

In this regard, we are against the passage of any emergency powers to be granted to the President for purposes of fuel or energy rationing. Instead, we recommend that the Department of Energy undertake an aggressive public information campaign to educate and inform people about energy conservation techniques.