Saturday, May 13, 2006
In re "inventory profits" and the price of gasoline
One of the common complaints I hear from noneconomists is, why should the price of gasoline go up as soon as there is any news of a disruption in oil flowing from somewhere like Nigeria, when the gasoline in the pipeline and the station's tanks have already been bought and paid for by the company at a lower price?
On the off chance it isn't completely freakin' obvious -- we have, after all, an exceptionally smart readership -- here's the answer.
CWCID: The Emirates Economist.
4 Comments:
By 
Randomscrub, at
Sat May 13, 03:15:00 PM:
As a related answer, the price spikes immediately so that the gas station can afford to buy the next tank full of gas, which will be at a higher price. You know, to replace the stuff you're buying now. Unless you want them to not be able to afford to fill you up...
By Dawnfire82, at
Sat May 13, 09:02:00 PM:
There were plenty of generators being sold at the normal price. My family bought two. If that guy loaded up on things and went down to charge an inflated price, playing off of a natural disaster, then the son of a bitch deserved to be locked up, just like the assholes along the evacuation routes who jacked up the price of gas at their stations to $12 and $15.
Maybe I'm just idealistic. After all, I bought gasoline, food, water, and sanitation items with *my* own money, drove it down in *my* truck, and sold it back to people there at the price it cost me to buy it. Stupid me.
By 
, at
Sun May 14, 07:20:00 PM:
Perhaps this is my simplistic mind working overtime, but why do Americans not whine when theaters mark up the price of a 32oz Coke to $4.50? Or baseball stadiums that do the same to hotdogs and beer? Is that not price gouging? Neither place allows you to bring these items in, which could be bought at a much lower price at any convenience store, yet we willingling pay these prices. Where is the Congressional investigation into this scandal?
By Dawnfire82, at
Wed May 17, 10:36:00 AM:
Sirius; By that logic, it's ok, and should be encouraged, for the defense industry to charge higher prices for bullets, weapons, and other equipment in a time of war, or for power companies to charge more for electricity during the summer when people run their air conditioners.
There is a certain point when the insurance of the common good is more important than profitable business practices. Hence the existence of anti-Trust laws, for example.
Just as an aside, I traveled there with a loaded sidearm and my uniform. (though I didn't wear the uniform on the drive)
