Rising and volatile oil prices suggest that oil scarcity is a important issue. So what can be done?
Personally, I think nothing – the price represents scarcity, and unless we think there are asymmetric information issues regarding the stock of fuel then this is fine. If we do believe these issues exist, then since fuel is a “non-perishable” we will see individuals/communities stockpile – again, there is no reason for government intervention.
Or so I agrue here.