The Fastest Road to Disaster: Gas-Price Cap

Americans appear to have forgotten the energy nightmare of the 1970s, its economic lessons and the fistfights that broke out while waiting in long gas lines to fill up.

How else can you explain the results of a recent survey that suggests large numbers of the U.S. population actually want to bring back mandatory caps on the cost of fuel?

Apparently, these Americans are nostalgic because they want to bring this bright spot of the 1970s back again. According to a Gallup poll published May 28, 53% support government imposed price controls.

Put more simply, these folks want the government to place a cap on what oil companies could charge customers for gasoline and diesel fuel.

Who's to Blame for High Gas Prices?

For frugal Americans -- an oxymoron to some of our international counterparts -- limiting the cost of filling up the car next time you stop off at an Exxon Mobil(XOM Quote), BP(BP Quote) or a Chevron(CVX Quote) gas pump may sound like a swell idea.

But it's not.

"Obviously, the Americans don't want any gasoline," says Charley Maxwell, senior energy analyst at Weeden & Co. in Greenwich, Conn. "It's a shorthand way of saying here's how we can get a lot of gasoline to disappear very quickly."

"And it would work that way."

That's not a problem we have now. Any trip you take to the gas pump you can fill your tank and do so many times over, if you have the cash.

But introduce price controls and that plentiful, albeit pricey, supply would dry up. At that lower price, the amount of fuel oil companies would be prepared to deliver would fall short of what consumers would want to buy.