During the late 1980s, many East Coast colleges purchased expensive equipment to enable them to switch rapidly from oil to natural gas in the event of a sudden oil price increase. In fall 1990, after Iraq invaded Kuwait and oil prices skyrocketed, the colleges put their new equipment to use. But when college administrators received bills from their local utility companies, they found that the price of natural gas had risen as well! Many of these administrators were surprised and angry at the utility companies, accusing them of "gouging" the public. The invasion of Kuwait did not threaten natural gas supplies, they reasoned, so there was no logical reason for a natural gas price hike.

Why did the price of oil rise after Iraq's invasion of Kuwait?

Why did the price of natural gas rise?

Were the administrators correct in their outrage?