Price Gouging, Gasoline, and Disasters

This post is inspired by actual events...

What is "price gouging?"  For some, it is simply defined as charging a price significantly higher than normal.  But I take it that as the words are used most often in the media and by economists, price gouging is the raising of a price of a commodity or service significantly higher during times of crisis or a natural disaster than it would be otherwise.  This is what I shall mean by "price gouging."

People don't like price gouging.  A spike in gasoline prices in Louisiana due to a natural disaster is unseemly.  It offends people.  It's unfair.  "Big Oil" is being greedy and not caring about anyone other than Big Oil.  They aren't looking out for the little guy.

Laws against price gouging in the U.S. are a relatively recent phenomenon, but one can understand why so many states have passed laws against price gouging: their constituents think that price gouging is unjust or unfair, and it's in the interests of legislators to please their constituents.

My first semester at OBU, my county made news due to accusations of price gouging.  According to the Democrat-Gazette:

AAA reported that a regular gallon of gasoline averaged $3.586 per gallon at midnight Thursday in Arkansas, up one cent from Wednesday.

In Arkadelphia, Prosecuting Attorney Blake Batson said he sent subpoenas Friday morning to several Clark County stations along Interstate 30, requesting information about prices being raised overnight from $3.68 to $4.19 a gallon.

State law 4-88-303 prohibits the raising of prices more than 10 percent of that charged immediately before an emergency proclamation unless the increase is merely "attributable to additional costs."

So what's the deal?  What's wrong with raising prices on a gallon of gasoline by $.50 from one day to the next?  I'm not an economist, but I'll do my best to defend the practice of price gouging (at least in most circumstances) since I can see no good reason to prohibit it.  Even though "price gouging" is a pejorative phrase (it brings to mind ice picks and eyeballs) I shall use it in a neutral sense.  I welcome comments and objections.