Gas prices and price gouging

In the aftermath of Hurricane Katrina, gas prices have soared at many locations. In Katrina's path of ruins, prices have risen almost a dollar overnight!

Recently in Atalnta, one gas station was asking 5.36 for a gallon of regular unleaded! Premium was selling for more than 6 dollars a gallon!!!

They did this, because GAS SHIPMENTS WERE DELAYED and a lot of people wanted gas. Had they sold a gallon for 2.70, they would have run out almost immediately. But because they raised the price, everyone who desperately needs gas will be able to buy a little.

However, people are furious over these prices in Atlanta, and chances are they are going to make a law that prohibits price gouging just like the law here in Florida which prohibits anyone from charging more than 10% during times of desperate need.

Before every major hurricane, long lines are standing at the gas stations, and soon, gas stations close as they run out of fuel one by one throughout the area. As soon as people spot a hurricane or tropical storm coming toward the Gulf of Mexico, they raid the gas stations. And some people who are late, can't get any gas.

I think the Atlanta gas station didn't do any wrong by raising the price; because as a result of higher prices, people did not raid the gas station, thus fuel was sold EXCLUSIVELY to those who needed it the most.

But unfortunately, this sort of logic is not common in America. All I hear from everyone is that this is cheating.

But I think it is not cheating at all. People should have the right to offer their properties and belongings for sale at ANY PRICE. And since we are talking about gas stations, their owners should be allowed to charge whatever amount they want to charge. If they want to charge 10 dollars for a gallon, then they should have the right to do it, because the fuel is their property.

But I have heard bad language and fury even in the radio. They said this gas station owner is cheating -- he is a thief, a crook, etc... Even some of my friends had bad comments. I just cannot understand these people.

They are not realizing that they are building the foundation for communism and tearing down capitalism by calling the gas station owner a theif.

How come a gas station owner has no right to sell his goods for whatever he wants to charge? This is insane.

I wouldn't care if a gas station decided to sell gas for $1000/gallon here in Pensacola. It wouldn't bother my at all. We would travel a mile and buy gas somewhere else! We would even travel 100 miles and buy gas in an another state if we had to. But who loses? Certainly not we. The only one who loses is the gas station that tries to sell gas way above the market value. They would have two options: Lower the price and charge the same what others charge, or keep the high price. If they hold on to the high price, they won't be able to sell the gas, and they will go out of business. So, they only hurt themselves by keeping the high price.

Higher gas prices which we call "price gouging" is really not a dirty business. It is a normal thing that happens in a free market. The advantage of higher prices is long-lasting supply. The disadvantage of price controls and prohibition of price gouging is empty gas stations.

We have felt the disadvantages of price controls first hand when Hurricane Dennis came to Pensacola. We did not buy gas soon enough, and both of our cars were empty when the hurricane hit. We had to make a business trip somewhere, and we had to postpone it, because we didn't have any gas. Back in those days, the price of gas was 2.31, and there were mile-long lines at the gas stations. None of the gas stations had gas in the city.

There is a category 5 hurricane in the Atlantic Ocean which is called Communism. The entire earth is covered with ruins, because of it. This storm never dies, and the news doesn't talk about it. We got used to it, I guess. But it's coming toward the US VERY SLOWLY but steadily.

I already did in earlier post....

Consider this the last straw: I'm calling that statement a lie. (Note: you have indeed said "do the ethical thing"; you've never said what the "ethical thing" is supposed to be.)

Cause I know I'm too lazy to re-type...

You're also too lazy to type the post number? Yeah, right.

You're a liar and without honor.....

You've consistently misstated, misrepresented and flat made-up hypothetical positions that I supposedly took.

Your lack of understanding regarding ethics and morality in business for a capitalistic society is astonishing. However, in your case, I'll must consider the source.

You're parents must be proud....

The post is #199, since we can now add truly lazy to your list of character flaws....

Shouldn't you be in school now, I'm sure the bell is ringing, little boy?

NeverGore

The post is #199, since we can now add truly lazy to your list of character flaws.... That's a little better; at least you're trying to back up your own argument. To redeem myself from the horrible shame of hearing you call me lazy, I reproduce your recommendation right here:

Hold the standard margin percentage as a fixed profit during a crisis....thus if they had a standard 10% and were buying gasoline at $2.00/gal they would continue to charge the $2.20/gal until their supplies ran out. If the new gas came in at $3.00/gal then they would charge $3.20/gal until the state of emergency was over....then let full free market reign again...

You have singularly failed to answer the two objections that have been raised long ago:

First, if a new shipment comes in at $3/gal, the guy who sold his gas at $2.50/gal can't afford the new gas shipment. You're assuming enough capital in savings to purchase a whole shipment of gas despite a shortfall on receipts from the last shipment.

Second, this method of distribution guarantees that the gas station will sell out completely in short order, as everyone stocks up. (Note: this is already happening in Georgia, where anti-gouging laws have been activated.) So your recommendation is precisely as I've described it: first-come, first-served, until the pump runs dry. You haven't remotely proven that this results in the fairest, most equitable distribution of fuel. The first complaint is that first-come, first-served is not at all biased in favor of use by emergency vehicles, but I would think that the most ethical distribution system would give priority to emergency vehicles in some way, shape or form. First-come, first-served, fails that test.

So having claimed that this strategy is the most ethical, go ahead and prove that it is in fact more ethical than the alternatives. Ready? Set? Go ahead.

You posted that to the wrong person. That quote is from post 1, my post is post 2.

But just to get the word out there, price gouging is very dirty business. It should be cleaned up as much as possible, ASAP.

But as I said in my original post, I wish boy do I wish that was the biggest of our problems.

Our problem is supply and demand that stems from all of the refineries that were taken offline via Katrina.

^^^^^^^^^^^^don't go there right now on gas taxes. There might be a time for that, but not now.^^^^^^^^^^^

I disagree.

With all of this talk about gouging, anybody who doesn't mention the tax part of the price in my honest opinion is a friggin liar.

I see no difference, if we're going to complain about private industry gouging us we should also complain about government gouging us.

What's good for the goose is good for the gander.

I agree with you about the price caps. Supply and demand is what will solve this problem. We need more refineries.

But to say we should ignore the taxes is as idiotic as saying that we should ignore the gouging.

Unless you don't really know just how much taxes is in your gas. Then I can understand why you said this.(though it changes from state to state)

I know exactly how much gas tax we pay. I live in one of THE highest gas-tax states. I do not think overall that there is any price-gouging going on. There could be a few individuals here and there who are, but if you are a proponent of supply and demand, then you understand why the prices have skyrocketed in the past few days.

Calling someone a friggin' liar is really beyond the pale, BTW.

^^^^^^^^^^I live in one of THE highest gas-tax states. I do not think overall that there is any price-gouging going on.^^^^^^^^^^

*shrug*

Ok. Perhaps you could tell me what the percentage or dollar amount is?

^^^^^^^^^^Calling someone a friggin' liar is really beyond the pale, BTW.^^^^^^^^^^^

It wasn't directed at you specifically. It was a general rant at those who only look at one part of the gouging.

You can call it economics 101 or whatever. The gas companies have made outrageous profits due to a hurricane. They have compounded human suffering and have hit the poor the hardest. They didn't have to raise their prices, but they did.

Yes, merchants can charge whatever they they want for their product. The law of supply and demand.

Yes we also have a zillion lawyers out there who are would jump at the chance to bring a huge class action lawsuit against the the oil companies. There would not be a jury in the country that would not return a judgment against the oil companies. The sky would be the limit on this one, perhaps $100 billion.

Yes we also have a lot of angry people who will vote democrat on 2006 over this. Republicans are equated with big oil. This could swing the house and senate to democrat in 2006. Perhaps put hillary in the whitehouse in 2008.

Oil companies thought profits first and did not foresee the consequences. If they would have kept prices reasonable and announced this publicly they would have made a huge public relations coup. Now they are (still) despised by most people, economics 101 or not.

In Wisconsin, we pay .30/gallon gas tax. The federal gas tax is in addition to that. We also have a minimum mark-up law that mandates stations charge at least 7% above the wholesale price.

What some people call gouging is simply station owners trying to keep their doors open by keeping gas in their tanks when they have a run on gas and are unable to get fresh deliveries.

The reason why many people hate price gouging is because they say the "poor" could not afford to evacuate the city in case of emergency.

What they don't realize is that if the price of oil keeps going up like it is, then the time will come when the poor won't be able to buy gas at all. What are they going to do then? Before we know it some people will start talking about gas being a necessity and a "right" rather than a privilege.

If or when gas becomes a luxury item, communists will have to face reality: It's not possible to defy the forces of supply and demand.

we pay .30/gallon gas tax. The federal gas tax is in addition to that. We also have a minimum mark-up law that mandates stations charge at least 7% above the wholesale price.

Sounds like gouging to me. One layer of padding built up on another.

If any evil corporation had multiple layers of profit in this fashion we'd never hear the end of it.

What some people call gouging is simply station owners trying to keep their doors open by keeping gas in their tanks when they have a run on gas and are unable to get fresh deliveries.

I agree. Some of the "gouging" is puffed up. But some of the complaints are legit.

But the bottom line is the two biggest problems are refineries(supply) and government intervention.(EPA and taxes)

The price actually went up .16 in less than two minutes.

It doesn't matter... It was still gauging if it went up faster than I think it should have... After all, the wholesale market is just a bunch of greedy robber barons splitting dividing the spoils from the working-class... The station owner should have just sold the gas for less than it was worth--I mean, a whole 16 cents a gallon... that means it will cost me almost $2.50 more to fill up my car! Talk about theft! Call the government!!

It's a hopeless case. Some people are just willfully ignorant. The esteemed poster you were responding to probably doesn't even know what the wholesale market is, and doesn't care to learn--it would just burst his little sense of self-importance (e.g., heroic little guy fights back big evil corporation).

^^^^^^^^You can call it economics 101 or whatever.^^^^^^^^^

Heh, that's what it *is* called. These companies control something in which everybody uses, and the price keeps going up not because of gouging, but because of supply and demand.

The gouging(and feel free to post any links that I might have missed) is being pointed at the gas stations themselves. They are raising their prices while the gas they already have in the ground hasn't changed in price from what they already paid for it.

The thing I find funny is this notion that once we move off of oil everything will be A-OK. Nothing will change. Once (x resource) becomes the replacement for oil then (x resource companies) will become the new political tools for the liberals as they will point the finger at that evil (x resource company) making money.

^^^^^^^^^^ Yes we also have a lot of angry people who will vote democrat on 2006 over this.^^^^^^^^^^^^

I disagree. The laws of supply and demand cannot be ignored. What comes up to unrealistic levels must come down. It'll come down before the election.

^^^^^^^^Perhaps put hillary in the whitehouse in 2008.^^^^^^^^^

Nah. You have nothing to worry about from hillary. NOTHING.

If she gained the nom from the D in 2008 she would single handedly re-define the term "negative turnout". As conservatives we need to worry about evan bayh or perhaps mark warner. Those who could put the mask on and actually fool people. There aren't enough people fooled into thinking hillary is a centrist for her to win.

^^^^^^^^^^^^If they would have kept prices reasonable and announced this publicly they would have made a huge public relations coup.^^^^^^^^^^^^

I understand what you are saying. And unfortunately being as americans arent taught things such as economics anymore it's easy for the media to manipulate them.

But the prices will come down. Supply and demand will complete it's circle.

Sadly you've hit the nail on the head.

^^^^^^^^^It doesn't matter... It was still gauging if it went up faster than I think it should have... After all, the wholesale market is just a bunch of greedy robber barons splitting dividing the spoils from the working-class... The station owner should have just sold the gas for less than it was worth--I mean, a whole 16 cents a gallon... that means it will cost me almost $2.50 more to fill up my car! Talk about theft! Call the government!!^^^^^^^^^^^

That's exactly how the people are viewing it as they've been trained over decades to think as liberals do. You're a victim. Between liberal infiltration into our schools and the media this victimist attitude will be very hard to overcome.

It's easy to be a victim, and liberals exploit this at every turn.

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