Fuel Price

This article is prompted by the suggestion that government regulate fuel prices,
in particular the requirement that price increases be announced in advance is addressed.

© 2004, R. W.C. Stevens

  It has been suggested that gasoline retail vendors should give a two-day advance notice of any price increase. I, for one, am against this. Why should another chunk of bureaucracy be added into our lives? I doubt it would do us any good!

• It will put an end to price wars. No more will there be ultra-cheap fuel prices, for when will a vendor be willing to put his prices down for that long!
• Retailers will be hesitant to put their prices back down, when the pricing at their supplier allows it. If there is a market turn-around, retailers will not want to be far behind on an increase. When the price finally does drop it will drop in small decrements spread over a longer time than what it would be in a free market.
• Even with the proposed legislation, there will be opportunities for abuse:
  • Retailers may regularly post notice that the price will be going up, even when they have no real intention of raising prices, just to be ready if an increase is necessary. If the legislation is intelligent enough to forestall a feigned increase, then perhaps the retailers will execute the rise, for the minimum time, and then put the price back down. Won’t you feel gouged then!
  • Retailers, on deciding a price increase is due, may simply post notice and close the pumps. “The tanks are empty! Come back in two days” [and pay the higher price].

  Let us keep government out of the free market. If you relay want government involvement in fuel prices, let it be involvement in the form of taxation. Tax the fuel based on its CO2 and other pollution content. This, I could support, provided the government would spend, efficiently, the revenue on research and development, and on corrective measures.

  Furthermore, I, for one, do not want to spend an extra 2¢ per litre on gasoline, just to pay some bureaucrat to administer structured pricing.

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