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Gouging.... Plain and simple. Those owners need to be delt with.



It's happening here. Most stations are still in the $2.60 range, one is at $2.99
 
We had a mini gas crisis develop here in Atlanta yesterday. There were rumors flying around that gas stations were running out and would be closing down in mass. This generated a panic and folks were lined up at gas stations like they were back in the 70's during the Jimmy Carter induced energy crisis.



A semi-reduction in gas supply to the area caused by Katrina, coupled with the panic buying caused supplies to plummet and prices to sky rocket. By the end of the day, things had settled down somewhat and prices settled back down to around $3.09 per gallon. At one point, there were some stations selling gas for over $5.80 per gallon.



BTW, this is not price gauging we are seeing, just simple supply and demand economics at work. Once the supply is replenished and demand is tempered (by the high prices), then things settle back down to where the price should be. Government should stay out of this, the economy and pricing of commodities is self regulating if they keep their stinkin hand off of it!
 
Supply and demand yes, economic wise, nope. This is tyrannical greedy gas station owners looking to make a few hundred thousand quick bucks. The gas didn't cost them any more in a one-hour period but htey raised the prices by $2-3. That's greed.



This spike in prices in general may be atributed to supply and demand, but not entirely. The only supply and demand that comes into play is the fact that gasoline is a "necessity" and thus is always in demand. If everyone calmed down and really thought this through, prices would remain stable. But instead everyone gets whipped into a feeding frenzy by over-hyped news reports and rushes out to top off the SUV, hybrid or whatever they are driving. I refuse to play the game. I filled up luckily on Monday before all this price stuff hit. I paid $2.499. I will not "top off" or anything until I need to. The gas will be there.
 
>> BTW, this is not price gauging



Actually, when it goes up from $3 to $6/gallon the same day, I kinda think it is price gouging.



It's hysteria and a vicious cycle more than anything. A rumor starts that there will be rationing, high prices overnight and people hit the stations; excessively long lines form and people around the area see the lines and watch the price jump 20¢/gallon which it did most everywhere yesterday and they say "the rumor must be true", so they pile into the car and get in line. Dirt-bag salesman see the lines around the block and worry that they might run out before their next shipment and raise the prices $2 or $3/gallon.



That's not true supply and demand...that is price gouging and hysteria.



TJR
 
You guys are thinking at the macro level! At the micro-level, the spike in price was due to a local dwindling supply and a local spike in demand. If one was willing to spend $6.00 a gallon for gas, then that is the price regardless of how much the owner paid for the stuff when it was put in the tank! If folks says screw it and stop buying gas due to the high price, then the price comes down to what folks are willing to pay! Did you guys miss this day in Econ-101 class? :D
 
Actually, I think I am thinking at the micro or local level.



You do realize that most chain stations are independently owned and operated, but get their gas from a regional supplier, and that regional supplier sets the price that the operator pays. And, that the operator typically charges a few pennies per gallon over their cost. And, that the operators have computer feeds from their suppliers showing the price change throughout the day.



When I see the price go up 20¢ a gallon as it has a few times the past days, I take it that the price to the operator has changed because I see the price of crude going up similiarly; and at a macro level I see that same relative price increase throughout most of the country.



That is true supply and demand at a macro level in action.



However, when ONE or TWO or a handful of LOCAL operators raise their prices by over $2/gallon, well, that isn't supply and demand at a macro level.



Yes, I understand you are talking about "macro economics" (not macro vs micro with regards to regionality or domain) and "supply-side economics", but, frankly, the price of gas when it hit $6/gallon yesterday in Atlanta was not pure supply and demand...it was mostly hysteria. The supply hadn't changed radically, and the increased demand was caused by hysteria and short-lived, and the price gouging fed the artificial demand spike.



Case in point, gas prices have already dropped back to their norm in most of Atlanta. Because the "run on the banks" was over. It was all artificial.



I agree that there is an element of supply and demand at play, as the operators couldn't gouge if the demand wasn't there. But it was gouging nonetheless, and a vicous cycle.



You can't seriously think that $3.09 to $6.00 per gallon change in one day with a change back to $3.00 the next wasn't gouging?



TJR
 
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buck_henry -- I understand what you are saying, and to an extent I agree with you. However, in some places, that is against the law. The Michigan Attorney General has prosecuted some stations for doing similar things, in particular I recall after 9/11. (I know you said that government should stay out of it, but that is not the reality.)



I have also heard people use the supply and demand arguement on the macro level -- ie., regarding the price of crude oil. That doesn't work either, because oil isn't traded on an open market. The price is controlled by a cartel, namely OPEC. This is where I would like to see the President get involved. The estimates that I have heard is that it costs around $4 for OPEC to produce a barrel of oil, and they are now selling at over $70. Between that and environmentalists not allowing us to build new refineries, the price will remain quite high.
 
I have been advised to boycott buying gas on on Thursdays to help some group send a message that the public is very unhappy concerning the rise in fuel prices. This was advised even before the hurricane.
 
Fun stuff guys! I guess what I am trying to say is that it really does not matter why the price was $6.00 per gallon, only that folks are willing (or not willing) to pay that much that ulitmately sets the price.



If a store decides to charge $6.00 a gallon due to the hysteria, and the store next door is still charging $3.09, then who do you think is going to sell more gas? The guy at $6.00 a gallon cannot sustain that price if everyone else is selling it for less.
 
Buck, what I think you are describing is "calculating what the market will bear", which is less an issue of supply and often more an issue of perception, percieved value and emotion. I have always considered aspects of "the market setting its own price" and "supply and demand" to be related, but subtly different.



Bottled Water, for example, is more of a "what the market will bear" price setting, and its price is set more by emotion and other factors like marketing and the consumer's need to pamper and feel good about themselves than by true supply. The SUPPLY of fresh water in this country is GREAT. The demand is pretty constant per person and has been since the dawn of time since there is only so much water a body can or should consume a day. Yet, we have a bottled water aisle in every supermarket and conv store, and we pay more a gallon for bottled water than gas.



Go figure!



TJR
 
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In Minnesota there is a stupid law on the books that states that no gas station can have gas lower than the highest station by so many cents or they will get fined. This was done to protect the little stations form the big mean stations who actually might try to lower gas prices for the consumer to be more competitive. How do you like that law? Then again - this is the "Socialist Republic of Minnesota."
 
lucky people in jersey set their price once a week, friday morning they change it, a whole week of on set price is great untill friday comes, then it skyrockets.
 
Thats why I put the kidde pool in the back of the Trac yesterday and filled it up with gas. Of course I have to take corners real slow to keep from sloshing it out. ;);)
 

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