Friday, April 13, 2012

Panic At the Gas Pumps

There are many things we take for granted like fuel at gasoline stations. Last month in England, fuel tanker drivers voted for "industrial action" which could have resulted in a strike of delivering fuel to 90% of the stations. Two ministers in the government offered helpful advice:

1. "a bit of extra fuel in a jerry can in the garage is a sensible precaution to take"

2. "If there is an opportunity to top up your tank if a strike is potentially on the way, then it is a sensible thing if you are able to do that"

These two comments caused a panic as motorists raced to stations to fill cans and top off tanks before the possible strike. Fuel sales climbed 50% and stations ran dry. In Christchurch, Dorset, police closed filling stations after the town became gridlocked with motorists trying to fill up.

Bottom Line

As with many other "just in time" supply chains, it takes very little increase in demand to wipe out supply.

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