Keeping prices “artificially” low leads to two outcomes: Hoarding and failure to restock. You can prevent hoarding with rationing (assuming of course you can pull it off – people don’t keep coming back for more, etc.) but stores won’t restock if it’s not worth it.
Let’s say the local water distributor is out of stock. A store owner might be willing to hire a trucker to bring in a load of water from further away, but that will cost more than his usual stock. If he can’t recoup his higher costs, he won’t do it.
The moral argument is that price gouging prevents poor people from being able to afford necessities, but not allowing prices to rise to the market level means that there won’t be any of the necessities available for any price. Nobody will have bottled water if it’s not worth it for businesses to incur the extra costs to bring it in.