Gas Prices - the REAL way to reduce them!

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."

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.

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.

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?

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.

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.

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.

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.

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?.

I don't think that preventing or regulating price gouging will affect the supply. In an emergency situation, they"ll buy it regardless of price, but some who need it will be unable to afford it.

People should be punished for taking advantage of people during emergencies.

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?.

How about just putting a limit on how many gallons one can purchase?

I don't think that preventing or regulating price gouging will affect the supply. In an emergency situation, they"ll buy it regardless of price, but some who need it will be unable to afford it.

People should be punished for taking advantage of people during emergencies.

It doesn't change the supply, that's part of the point. Price affects quantity demanded, so if the state wants to limit the amount purchased, they can do so, but it won't be anywhere near as efficient as letting the market do so itself. There are too many ways around limiting amount purchased.

You are one of the ones preaching the best way to get consumers to conserve is to increase prices.

I have never stated that high prices during an evacuation, or any other time, was the "best" way to conserve, just the most likely way. I have stated ways in which the gov't could encourage conservation without taxing or price control. There is a big difference the what I consider to be the best way and most likely way. ;-)

It doesn't change the supply, that's part of the point. Price affects quantity demanded, so if the state wants to limit the amount purchased, they can do so, but it won't be anywhere near as efficient as letting the market do so itself. There are too many ways around limiting amount purchased.

The market takes time to regulate and correct itself. That's why there are "emergency" controls and measures. Outside of price gouging during emergencies I am all for leaving the market alone to correct itself.

Kitty's suggestion of limiting the amount you can purchase is better than allowing insane prices, but then it opens the can of worms of how much each person gets. I can drive my car 120 miles on 4 gallons of gas (even fully loaded down during an evacuation), whereas some SUVs could only make it 24 miles on the same amount. Should I get less gas or do I benefit for buying a more efficient vehicle?

Joe, I?d be interested in hearing your suggestions. I know about doing away with incentives for purchases on low gas mileage vehicles, and I?m all in favor of that, but I don?t believe that it will be a drop in the bucket of energy conservation.

Scooter, limiting the amount you can purchase brings up what you mentioned and it encourages a black market ? i.e. folks buying their portion and selling half of it, etc. Government price and consumption controls are always a bad idea. Price is the most efficient way to get people to conserve, which is entirely necessary in an evacuation. Folks leaving are most likely to take the most fuel efficient car when prices are high, so you again have less quantity of gasoline demand when prices are high. As always, price is the most efficient way to allocate scarce resources.

I think alternative sources of energy is the answer. The static generator, for example. I haven't heard anything more about that. When we take a family trip, there are 7 adult size persons in one vehicle. Try doing that in a small economy car!

To cut down on usage lets start by eliminating the LOOOOOONNNNNGGGG lines of SUVs, trucks & cars (with engines & A/Cs/heat running) lined up at the schools and fast food drive-up windows....yeah, like that's going to happen:roll:

I think the school needs to do a questionare about why people are not using the buses, and are picking up/dropping off their child themselves, and make adjustments to their system.

Many people have a hard time doing it voluntarily, especailly when each of us is only one of 300,000,000 Americans.

That's why I advocate use of the most direct channel of behavior mod ever known -- through the wallet. The way to conservation is through the wallet. If we want our great-grandkids to ever know the joy of driving -- to the movies or across the country -- we have to stop using as much.

We need to increase, not decrease, gas prices in this country, and soon.

That's extreme, I don't think sufficient data went into that conclusion.

Folks leaving are most likely to take the most fuel efficient car when prices are high, so you again have less quantity of gasoline demand when prices are high. As always, price is the most efficient way to allocate scarce resources.

I disagree. When evacuating, people tend to take the vehicle which can hold the most junk, in addition to family and pets. That is not likely to be the Toyota Prius if there is a Suburban in the driveway. In fact, more likely is the idea of taking both vehicles packed with junk.