Gasoline price spikes in Oklahoma and some other states indicate that illegal price gouging is going on. Profits reported by property and casualty insurance firms indicate that premium hikes are unwarranted.

Those are the populist outcries. Now for the reality:

Travelers leaving Texas and entering Oklahoma have noticed a dramatic difference in gas prices recently. Although the differential has started to decline, Oklahoma drivers have been floored by the cost of filling the tank. Price gouging? No. Gas retailers price the commodity based on what they’re paying refiners for the product.

As The Oklahoman’s Adam Wilmoth explains, the nation is divided into federal Petroleum Administration for Defense Districts and Oklahoma is in a different PADD than Texas. Refinery downtime in the district that includes Oklahoma accounts for price hikes that aren’t being seen in Texas. It could be worse: Oklahoma’s average price for regular unleaded was $3.735 in a recent snapshot of gas prices. In North Dakota it was $4.085.

Raising prices too much under some circumstances can be illegal. “Gouging” is often drawn as a weapon to criticize what could be ordinary business pricing practices. New York has settled gouging complaints with as many as 30 gasoline retailers based on alleged gouging following Hurricane Sandy last year. Oklahoma Attorney General Scott Pruitt reminds us that dramatic price increases are illegal following designations of federal disaster areas. A state law passed after the May 3, 1999, tornado outbreak led to the protection.

Protection against increases in property and casualty insurance premiums is another matter. Since Oklahoma leads the nation in federal disaster declarations in recent years, it’s no surprise that premiums are high and will get higher. Price gouging?

No. Unlike gasoline retailers, risk firms are strictly regulated. The last thing customers should want is an artificial premium structure so low that an insurer couldn’t cover claims following a major disaster.

After Hurricane Andrew devastated Florida in 1992, 11 insurance companies with policies in the state went bankrupt. Others stopped insuring property in Florida.

To manage their risk, the firms that remained raised premiums and deductibles. The state formed its own insurance company for those who couldn’t get coverage elsewhere.

This was somewhat of a political sop by then Republican Gov. Charlie Crist, acting in the wake of outrage over insurance company practices. But even clients of this “government” insurer face premium increases in order to keep the company actuarially sound.

In 2011, State Farm lost $ 4.5 billion nationwide on its property and casualty lines. This was largely due to just five catastrophic events that the company said were among the 25 largest in its history.

Like other insurers, State Farm can’t lose $4.5 billion a year for underwriting property and casualty policies. It must either raise premiums or quit the business. Last year, State Farm handled 47,000 claims for hail damage in Texas alone.

Every season of gasoline price hikes and every positive earnings report released by an insurer revives the price gouging outcry. Price gouging isn’t a myth. When illegal gouging takes place, it should be prosecuted.

But the gas price differential between Oklahoma and Texas doesn’t qualify as price gouging.

Neither will the insurance premium and deductible increases that are sure to happen in coming months.

— The Oklahoman