Gas Prices - the REAL way to reduce them!

[scooterbug44]

Oh yes, taking action to stop price gouging is definitely that dangerous first step towards ration cards! Good gravy

Destinconcierge, do you have more info on this? The petition site didn't really explain the bill, its enforcement etc.

Is there any evidence that price gouging is to blame for high gas prices or is it a political ploy to appease angry voters? So far the explanations I've heard include increased demand and reduced refinery capacity.

 

[6thGen]

Oh yes, taking action to stop price gouging is definitely that dangerous first step towards ration cards! Good gravy

First - there is no such thing as price gouging. Second - here is something from the internet phenomenon Wikipediam, which is of course always right, on the 1973 oil crisis.

"The crisis was further exacerbated by government price controls in the United States, which limited the price of "old oil" (that already discovered) while allowing newly discovered oil to be sold at a higher price, resulting in a withdrawal of old oil from the market and artificial scarcity. The rule had been intended to promote oil exploration. This scarcity was dealt with by rationing of gasoline (which occurred in many countries), with motorists facing long lines at gas stations."

 

[beachmouse]

Isn't price gouging already illegal in Florida?

During declared state fo emergencies, which we are currently under because of wildfire threat.

The problem comes because the wholesalers the gas stations buy from are out of state, and aren't covered under state law. The gas stations get the squeeze- gas at the retail level is a low margin product to begin with, they can't legally pass along their full increased costs while we're under emergency orders, but the price increase they are allowed is still enough to discourage motorists from picking up a couple of higher margins at the Quickie Mart while they're fueling up.

 

[kathydwells]

Price gouging is a frequently pejorative reference to a seller's asking a price that is much higher than what is seen as 'fair' under the circumstances. In precise, legal usage, it is the name of a felony that applies in some of the United States only during civil emergencies. In less precise usage, it can refer either to prices obtained by practices inconsistent with a competitive free market, or to windfall profits. In colloquial usage, it means simply that the speaker thinks the price is too high. Non-pejorative uses are generally in reaction to what the writer believes is an unjustified restraint on the market.

The economic theory of the free market suggests that, even in unusual circumstances, price controls do more harm than good by preventing incentives for the supply of needed goods. For example, in a disaster situation, a very high price for equipment (e.g. tents) will prompt hugely increased supply of the relevant goods. Libertarians are among those who robustly defend the right of firms to charge what they want regardless of the circumstances. The contrary argument is that emergency situations increase inequality markedly and allowing vendors to exploit emergency situations to gain extra profits is unequitable.

As a criminal offense, Florida's law is reasonably typical. Price gouging may be charged when a supplier of essential goods or services sharply raises the prices asked in anticipation of or during a civil emergency, or when it cancels or dishonors contracts in order to take advantage of an increase in prices related to such an emergency. The model case is a retailer who increases the price of existing stocks of milk and bread when a hurricane is imminent. It is a defense to show that the price increase mostly reflects increased costs, such as running an emergency generator, or hazard pay for workers.

 

[scooterbug44]

During declared state fo emergencies, which we are currently under because of wildfire threat.

The problem comes because the wholesalers the gas stations buy from are out of state, and aren't covered under state law. The gas stations get the squeeze- gas at the retail level is a low margin product to begin with, they can't legally pass along their full increased costs while we're under emergency orders, but the price increase they are allowed is still enough to discourage motorists from picking up a couple of higher margins at the Quickie Mart while they're fueling up.

Thanks for the explanation!

How is it gouging if they are only raising the prices because of their increased costs, not for a greater profit margin? I saw a recent article where a station owner in WI was made to do away with a savings card program because it technically went against their state law that it had to be sold at a minimum X% markup (law was enacted to keep large companies from pricing below cost to get rid of competitors).

If we have a federal law about price gouging, would it also only apply in National Emergencies?

 

[6thGen]

I know what they call price gouging, but it cannot exist in a free market. Sellers only receive what buyers are willing to pay. Price gouging is an efficient market mechanism because it forces buyers to allocate accordingly. To give you an example, when Opal came through Alabama, Auburn put in price controls on ice, while Opelika did not. Auburn ran out of ice, and Opelika did not. Opelika residents purchased what they needed since the prices reflected demand, while Auburn residents purchased far more than they needed (they got greedy) and the businesses in city ran out of ice.

 

[Smiling JOe]

First - there is no such thing as price gouging. Second - here is something from the internet phenomenon Wikipediam, which is of course always right, on the 1973 oil crisis.

"The crisis was further exacerbated by government price controls in the United States, which limited the price of "old oil" (that already discovered) while allowing newly discovered oil to be sold at a higher price, resulting in a withdrawal of old oil from the market and artificial scarcity. The rule had been intended to promote oil exploration. This scarcity was dealt with by rationing of gasoline (which occurred in many countries), with motorists facing long lines at gas stations."

Sounds like the Irish Potato Famine.

 

[Smiling JOe]

I doubt high gas prices hurt quicky mart gas stations' profit margins as much as installing pay at the pump machines. I never go inside, except to get a receipt.

 

[Smiling JOe]

6th Gen, I hear you on the idea of keeping gov't out of the free markets. Regarding price gouging, I disagree with your idea that it doesn't exist, in particular cases like evacuation. If we are under evacuation, and traffic is bumper to bumper for miles, free market is taken out of the picture. You can purchase gasoline in extremely select places, and in many cases, there is only one option if you are going to evacuate, and that is to buy gas, no matter the price. Under normal circumstances, you could drive a little farther and find a competitor from whom to purchase.

 

[6thGen]

6th Gen, I hear you on the idea of keeping gov't out of the free markets. Regarding price gouging, I disagree with your idea that it doesn't exist, in particular cases like evacuation. If we are under evacuation, and traffic is bumper to bumper for miles, free market is taken out of the picture. You can purchase gasoline in extremely select places, and in many cases, there is only one option if you are going to evacuate, and that is to buy gas, no matter the price. Under normal circumstances, you could drive a little farther and find a competitor from whom to purchase.

In an evacuation, there is obviously a very limited amount of fuel, so c-stores are correct to drastically increase prices to encourage consumers to only purchase what they need to get to an area with more gas and leave some for the next guy. Poorly thought out gouging laws is the main reason you see gas stations with zero fuel as you leave the beach in the event of a hurricane. You are one of the ones preaching the best way to get consumers to conserve is to increase prices. That?s exactly what happens in that situation, and it helps to prevent shortages. It also inadvertently encourages people to carpool and lessen traffic, so it would make sense for the state to encourage ?gouging?.