So I just finished watching the news and apparantly Hawaii has instituted a gas cap! The first state to do so. I this really good or bad? I guess it depends on who you ask. Would you want a gas cap in your state?....D
Gas Prices capped!!
- Thread starter BMXman
- Start date
Someone is going to have to take a hit. Pretty simple really. USA/Canada still have it made with gas prices when compared to many other parts of the world.
It's a dumb idea, plain and simple.
Esplain gas cap.
I'm thinking it would be the same thing as a salary cap...looks like they only will be able to raise the prices so much per year as well as there being a maximum amount...DHeath Sherratt said:
Hawaii is apparently capping the wholesale price of gasoline in an effort to stabilize prices at the consumer level.Heath Sherratt said:
They are going to take an average of the gas price in NYC, LA, and the Gulf Coast and set that as the price per gallon of wholesale.
It's a dumb idea.
I think so too...but so far I'm in the minority with my friends...DSkaredShtles said:
Well, the majority of humans in the world are morons, so I think you should be glad you're apparently not one of them.BMXman said:
I don't understand how that would be good or bad. Just different.
Heath Sherratt said:
well one bad thing IMO is....it would help out people who buy big inefficient gas guzzling vehicles....D
They need all the help they can get. 
There's a whopping disincentive for fuel providers to supply Hawaii in the long run, isn't there? And what happens when the supply of something drops, all else being equal?Heath Sherratt said:
Also, correct me if I am wrong, but it will screw with demand.BMXman said:
Keep the price low and demand goes up. However there is only so much gas that can be provided at a certain price level(correct?). There will be an influx of gas purchases, but it won't help gas stations as they can't make a decent profit off of the product they sell. I'm seeing the oppurtunity for a gas shortage over there. But I could be way off on this one.
The Ito
Capping gas prices is ignorant at best.....it'll completely screw up supply/versus demand. If the government wants to help then maybe they should CUT AND CAP the $0.50+ per gallon we pay in Federal and State taxes on the sale of gasoline, but I bet they won't do that to their slice of the pie.
if there's a cap, who makes up the difference from market price? that's the key fault in logic as i see it.
True DatSkaredShtles said:
Bingo.narlus said:
What most people fail to realize is that anytime you artificially f*#k with the price of a good *somone* has to pay.
There's no such thing as a free lunch.
If the state is implementing the price-cap, the costs (ie. losses) would probably be taken out of the local tax portion of the price and not out of the pocket of fuel distributors/gas stations.
I don't think it's a bad thing either. By capping the price they can ensure that all levels of the local economy stay in check. Everything you buy is priced in relation to fuel costs. Increased fuel prices make other prices rise (food, clothes, bongs, bike parts, construction...everything) which may lead to an economic slowdown as people burn through disposable income.
My guess is that the move is oriented more towards keeping the local economy flowing and ensuring that the cost of living remains viable for both residents and tourists.
I don't think it's a bad thing either. By capping the price they can ensure that all levels of the local economy stay in check. Everything you buy is priced in relation to fuel costs. Increased fuel prices make other prices rise (food, clothes, bongs, bike parts, construction...everything) which may lead to an economic slowdown as people burn through disposable income.
My guess is that the move is oriented more towards keeping the local economy flowing and ensuring that the cost of living remains viable for both residents and tourists.
Maybe in the extreme short run.dan-o said:
If the price of fuel is driven up by market forces then the rest of everything dependent on that cost *should* go up.
Attempting to massage the economy with price controls almost NEVER works.
SkaredShtles said:
As long as someone can make even the smallest profit, they'll sell to Hawaii. I bet Venuzuela picks up the slack.narlus said:
Gas might not be a monopoly, but it most certainly is monopolistic... the entry cost is extreme, so it's not like anyone can just start drilling.SkaredShtles said:
All other utilities are price controlled, so I'm not surprised that gas is controlled in some way too.
Hawaii?
They wanna be their own country anyway and ruled by a king:
http://www.ridemonkey.com/forums/showthread.php?t=128025
They wanna be their own country anyway and ruled by a king:
http://www.ridemonkey.com/forums/showthread.php?t=128025
The rest of us who don't live in Hawaii.narlus said:
not if they can make a greater profit elsewhere.LordOpie said:
A gas cap or any type of binding ceiling on a market price is a terrible idea. Anybody remember or heard about the gas crisis in the 70's. Yeah, I wasn't born either, but I've studied the results and causes and can tell you that the shortage was helped largely by a gas cap.
Here is what happens;
If the gas price cap is set below the market clearing price (equilibrium) there will become a shortage in supply. Basically consumers will demand more (at the capped price) than suppliers will be willing to supply. Huge shortages means supper long lines and or no gas. It is simple economics and amazing that one of our states would be stupid enough to repeat it.
Here is what happens;
If the gas price cap is set below the market clearing price (equilibrium) there will become a shortage in supply. Basically consumers will demand more (at the capped price) than suppliers will be willing to supply. Huge shortages means supper long lines and or no gas. It is simple economics and amazing that one of our states would be stupid enough to repeat it.
This WHOLE gas thing is a scam anyway. The top three oil companys just had record earnings last 1/4...WTF is up with that!!!
I just cant wait until gas gets so expensive that the "no blood for oil" hippies cant even afford gas to fill their hippie wagons.
Ummmmm.......... have you seen the prices lately? Of course they have record earnings. The product they sell costs a crapload more than it did a couple years ago.dhtahoe said:
yeah, but his point is that the prices are rising higher than the costs of production. since the market will bear it it's "fair" but still galling.SkaredShtles said:Ummmmm.......... have you seen the prices lately? Of course they have record earnings. The product they sell costs a crapload more than it did a couple years ago.
moral of the story: invest in oil companies
That's always been the moral of the story.........Toshi said:
Decent article: http://biz.yahoo.com/fool/050825/112499214615.html?.v=1
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