Gas prices and price gouging

News from Pensacola | September 1, 2005 | "Blueberry12"

[blueberry12]

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.

We wouldn't have been able to leave town even if we wanted to.

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.

[ExitPurgamentum]

We need to stop these threads, they have all gotten out of control,

On the contrary, it is the threads on which the so-called conservatives accuse corporations, government, anybody of greed --- like true socialists, really --- that are a problem. This thread is a pleasant exception. Is that what bothers you?

[Shalom Israel]

Would you say the same thing if every grocery store in a large area suddenly, and for no reason, raised the price of bread and milk to three times their normal cost?

Um, if a storm flattened all the farms in PA and closed the roads, I wouldn't be fool enough to say there was "no reason" to charge more for bread.

[EagleUSA]

Before you accuse someone of that, YOU have to show that decisions --- whether those of Saudis of gas station owners --- are irrational.
-----
Sorry but I don't agree. Greed is greed. Call it what you wish -- or analyze it to death. The bottom line is the same. There is no reason for crude prices as they are, other than greed and opportunity.

[mlc9852]

Actually in some places it is illegal. Florida for one.

[Adder]

"I rejoice when I see "gouging". It ensures that people are limiting their consumption to their required usage"

Hey great! Thats the same logic the Euro's use when they tax gas at 4 and 5 bucks a gallon!

[ExitPurgamentum]

Don`t kid yourself,they did this to achieve a greater profit.

Greater compared to what? Has it occurred to you that they sell LESS gas? What should they do with price to get the same revenue and be able to pay the bills --- the salary of the attendant, the utility bills, the insurance premia? What should the owners do, Mr. Socialist?

Everyone make your own conclusions as to the ethics. Oh yes, we live in the world of amoral relativism, where people are ignorant of how their own country works but each has his own ethics.

[wideawake]

An ipod is an item purchased with disposable income when the person buying it as able to afford it.

You're right. No one in America ever bought an iPod on impulse even though they couldn't really afford it.

OK.

Gasoline is a necessity for most people. No gas, no car, no work, no food.

In other words, people who live from paycheck to paycheck with no savings.

Many such people buy impulse items like iPods, big-screen TVs, etc. despite the fact that they can't afford them.

They'll drive up in a tricked-out Lexus and complain about gas.

Let me put it this way - I could go out tomorrow and buy 100 iPods if I wanted to and still pay all my bills and feed my kids.

But I don't own one.

I could go out tomorrow and buy a $3,000 big screen for every room in my house. But I have a single 3-year old 27-incher instead.

I could go out tomorrow and buy a brand new 2005 Lexus - after all I need a car for work too. But I drive a 1998 Chevy Malibu.

Therefore, when prices of important goods go up, I can buy them and still have plenty of savings left over.

Would you say the same thing if every grocery store in a large area suddenly, and for no reason, raised the price of bread and milk to three times their normal cost?

Bait-and-switch argument.

We're not talking about price hikes for "no reason."

We're talking about a very real, well-documented shortage.

[El Sordo]

"What is gouging? When you see price going up, when does it become gouging?"

A) When it's more than you are used to paying

-or-

B) When it's more than you think you ought to pay.

That seems to sum it up from where I sit......

[wideawake]

Thats the same logic the Euro's use when they tax gas at 4 and 5 bucks a gallon!

No - the Euro logic is that the higher prices due to taxation are necessary to (1) defray the medical cost of road accidents in their nationalized healthcare systems and (2) to force people to use less gas for environmental reasons.

It has nothing to do with rationing because of scarcity.

[Shalom Israel]

There is no reason for crude prices as they are, other than greed and opportunity.

Exactly what price is the correct one, then? And how did you calculate it? And when was it that you realized socialist planned economies were the way to go?

[ExitPurgamentum]

There is no reason for crude prices as they are, other than greed and opportunity.

There is no reason for one to think that other than ignorance. There have been tons of articles over the last few years that explained fully high crude prices: industrial boom in Asia, particularly China.

You did not even bother to think about the last post. One does not need to "analyze" anything here: mere definition of greed suffices. You don't seem to know what it is and don't bother to learn.

Suppose I see you eating cereals in the morning and accuse you of being a heartless parent, taking away from your kids the last drop of food they have. True, that CAN be the case. So how do we know it is not? Well, facts do help.

You would certainly be appalled if I did accuse you of such a horrible thing --- without a shred of evidence. And yet you are doing the same. And even when pointed that out you arrogantly plow away.

Very nice, Mr. "Conservative." When was the last time you thought of Commandments?

[CSM]

"Hey great! Thats the same logic the Euro's use when they tax gas at 4 and 5 bucks a gallon!"

Apples don't compare to well with oranges.

Here are some relevant facts for you:
1) Gas supply is reduced due to real damage done by Katrina.

2) 2 major pipelines are down (one is now at 30%).

3) Gas is required to run boats and helicopters that are RESCUING PEOPLE and moving REFUGEES to shelter.

If the entire country continues to use fuel at their normal rate, how do you propose we get fuel to the gulf to rescue people and transport aid into the area? They are no longer producing their own fuel, and they are no longer able to distribute fuel to the rest of us.

What good will your donation to Katrina victims do if the fuel is not available to run the rescue missions or the shelter generators?

The "price gouging" ensures that the rest of the country reduces their use of fuel, therefore freeing more resources for use in the Gulf area.

[babyface00]

The fuel in the tanks was purchased for far less than $6 per gallon. I am not even sure why gas jumped to $3.50. THAT I see as gouging

Where do you think the station owner is going to get the money for his next tankful of gas if it costs significantly more than the gas currently in his underground tank?

He has to sell the gas he has at his best guess at a replacement price for his next tankful (plus his miniscule per-gallon profit).

I don't know why this is so difficult for people to understand. If he thinks its going to cost him $3.50 a gallon next time that big truck pulls up to his station, then he's going to charge you $3.52 a gallon now. The gas currently in his tank was paid for when you filled up last week.

This is why all the stations raise prices at the same time - they all buy their gas from the same regional suppliers. They all read the market the same way, and they all set their prices so they can get enough cash from current sales to afford the next tank.

[Adder]

to force people to use less gas for environmental reasons.


Doesn't matter what the reason is...its the same logic. Raise the price high enough to make people do what we want.
In the post I was replying to it was so there would be resources available for another more desirable reason.
We have an anticipated scarcity, not a real one...yet, though I am sure it is coming.

[ExitPurgamentum]

It make sense. So, I can accuse you of being greedy and stingy because you refuse to pay a higher tuition in college: it's less than I think you "ought to pay." You are also engaged in gouging by asking for wages for your work: they are way too high --- certainly higher than what you "ought to be paid."

How more socialist can you be? The markets allowed this country to be come prosperous. Your ideology has ruined half of the world. Why are you ignorant of the institutions that made your country great?

[nevergore]

There is a difference between normal market pressures, competition and taking advantage of a community or nationwide disaster.

If you cannot discern the difference you're beyond reason....

The local gas stations did not raise their price because the gas they had in their storage tanks became more expensive, they did it to take advantage of a natural disaster and to essentially extort their community.

The premise you postured of the gas station owners only raising prices to ensure those who truly needed it could get it, is laughable at best.

If this is what you truly believe in, why don't you go buy a tractor trailer load of ice and go sell it in the devastated areas for $100 a bag.....I'm sure you'll be a popular guy....

There is a social responsibility aspect to being a good capitalist, some companies still have it. Walmart is a good example which is one of the reasons the "Libs" hate them.

NeverGore :^)

[Leroy S. Mort]

The fuel in the tanks was purchased for far less than $6 per gallon. I am not even sure why gas jumped to $3.50. THAT I see as gouging.

You might be interested in this explanation of simple gas station economics by a freeper who makes a living at it.

[ExitPurgamentum]

And when was it that you realized socialist planned economies were the way to go?

This constantly amazes me: when it comes to economics, "conservatives" think like the reddest of socialist.

Thank you for bringing sanity to this board. Shalom.

[wideawake]

Raise the price high enough to make people do what we want.

Wrong. The gas vendors are not raising prices to get people to behave in a certain way - they are raising prices to compensate themselves for the anticipated higher cost of restocking their supplies.

[finnman69]

http://www.fxnetworks.com/shows/originals/oilstorm/main.html