Why not have price controls on gas?

[Deja Q]

A simple enough question but likely not a simple answer and I am naive on the concept.

Any edification would be much appreciated, thanks!

[Ready4Change]

1. You mean profit controls?

Hmmm. Think I may have already answered the question.

[BlueJac]

4. Right on

[Nederland]

2. The Capitalist Answer

High prices are the result of too much demand or too little supply. Price controls do nothing to fix either of these problems.

[Extend a Hand]

6. sadly

rationing by price is about the cruelest way to reduce demand

[LSK]

15. demand doubled in the past 5 years???

I dont see how that is possible. Gas prices have about doubled since 2000, has the # of cars out there doubled???

[Nederland]

28. Combination of demand AND supply

Supplies are dwindling and demand is growing. That combination is why we are where we are today.

[tx_dem41]

29. What part of supply AND demand is difficult to grasp?

The price to supply the gas has skyrocketed through the price of oil, refining, and exploration. Demand has increased as well (remember cars aren't the only market for the refineries). If we put price controls on, nothing about supply or demand changes....but what will change is the ability to produce the oil, if we bring the prices down drastically.

[jody]

3. Are you suggesting that crude oil provided by nature belongs to all?

If so, then I agree!

:hi:

[izzie]

14. It should be. But that is the hang up with us and other countries.

And they do have a right to drill on your land if they buy up the rights. That has got to be a give away to big business. Those mineral RIGHTS LAWS.

[rinsd]

5. I don't know. Did they work in the 70's? I thought Nixon did that (nt)

[howmad1]

40. Actually in WWII.....

Price controls were on most everything. But, after all we were at war then and we were asked to sacrifice. Guess we're not at war now, dontchaknow?

[Imagevision]

7. Because first and foremost Bush and Cheney are OIL men...!

[benburch]

8. Because the oil companies would rather sell us NO gas!

Than submit to controls.

[DemocratSinceBirth]

9. Wouldn't You Have To Put Price Controls On Oil?

The cost of gas is a function of the price of oil....


I don't think OPEC is going to put up with price controls...

[Spinzonner]

20. The problem is that the function includes a percentage markup

SO that the Oil companies benefit proportionally from the runup in the cost of oil.

That's why their profits are up so much.

[tx_dem41]

33. Can you name a business/industry that does not markup on a product...

that it passes on to the consumer? In this case, they actually do something with the oil (refine it) before "passing it on" to the consumer.

[Spinzonner]

34. Who said they shouldn't markup or make a profit

The issue is to what degree it is a windfall profit in a heavily concentrated industry with a decided lack of competition, especially during periods of constrained supplies.

Perhaps you might explain how it is appropriate for them to - in effect - apply a tax to the increased cost of materials in their pricing.

[tx_dem41]

36. What "tax" are you talking about. My company marks up any material...

at about 7% pass-through. Its not dependent on how much the material was.

[tx_dem41]

31. Ding, ding, ding!

You humbly stated a huge problem with price controls. There are others...but you surely stated a current problem.

[libhill]

10. Yeah, right

The Republicans haven't, and won't, do a damn thing to control oil prices. It's all about corporate profits for them, and fuck the working public. They'll probably use this hurricane as a slimy excuse to drive prices up even further. But since the majority of sheeple seem to have voted for these ass hats, I have a hard time finding any sympathy for them - what's that old line? "You asked for it, you got it, Toyota".

[wli]

24. you forgot the words of WIlliam G. Boykin

"George W. Bush was not elected by a majority of voters in the United States. He was appointed by God."

[libhill]

26. LOL

n/t

[newswolf56]

11. Because the runaway prices will serve two Bush purposes:

(1)-Concentration of wealth by the oligarchy, in this instance by windfall profits not only on petroleum but on all transportation-dependent products (food, medicine, building materials, etc.)

(2)-Infliction of ever greater hardship on the working class, creating the climate of fear and despair that enables the oligarchy to forcibly LOWER wages (and thereby further concentrate its wealth).

In other words, capitalism in action.

[Deja Q]

18. Capitalism. Bingo.

If there are any capitalist supporters, they may as well put me on ignore.

I USED to like the idea of capitalism. But now it's perverted; has been for some time now. It sure as hell isn't like the capitalism taught to me in that cool Porky Pig/Sylvester Cat cartoon from 1954...

[DemocratSinceBirth]

19. It Has Nothing To Do With Capitalism

and everything to do with OPEC.....


They could charge $100.00 a barrel and if people are willing to pay it that will be the price of oil....

The only alternative is go to countries that produce oil and take it away....

[Deja Q]

32. Oil is a commodity like any other:

And in capitalism, commodities are bought and sold on the basis of supply/availability and demand.

A bit stupid, particularly for something so vital, but I didn't make the system. I just live within and obey it.

Oh, capitalism is a big part of it - I could care less who owns it. (also note OPEC saying that (before katrina) it's not supply shortages but supply tightness causing our prices to go up and that OPEC would pump more.)

But I suspect we'll be going to those other countries anyway...

[DemocratSinceBirth]

35. We Are In The Era Of Peak Oil...

If oil becomes too cheap it will cause more consumption and hasten the day of reckoning...

I am not sure that is a good thing....


We will never "run out of oil" but it will become so scare and hard to get at that it will become prohibitive to unearth it....


The challenge is to develop alternative forms of energy...

[sniffa]

12. teLL it to castro, comrade

[cloud_chaser1]

13. We look in the wrong places.

The oil price problem lies with the speculators and the oil companies.
I would put controls on both. If someone is going to deal in oil futures, why not require that they be licensed and restricted on how many deals they may make in a day and how much oil can be involved.

The oil companies, before they could hike prices, will be required to show on paper the reason for the price hike and they would have to give evidence that it is not being doing in concert with other oil companies. In other words, if a Shell oil refinery has to be shut down for a day or so for whatever the reason, Chevron cannot claim that the shutdown has caused them to suffer. In other words, a problem for one oil company may not be claimed by other companies.
And if it is found that they are in collusion, conspiracy charges may be brought against them.

[alarimer]

23. sounds reasonable

I have always thought the price of gas was about collusion. i read somewhere that companies charge prices based on the neighborhood and various other characteristics of the place where the gas station is. It has always seemed that the lowest prices were in the crappiest neighborhoods (which is the opposite of the way things usually work) but I don;t know if there is any proof of that. It just seems odd that the price isvery nearly the same no matter which gas station you go to.

[Star]

25. I've been trying to find out about oil futures

Here's my post from earlier today about a caller on the Ed Schulz show:

http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=104x4498147

He basically said the same thing you're saying, but I don't understand oil futures. Can you help?

[cornermouse]

16. What are you?

A commie pinko? :sarcasm:

[SnoopDog]

17. Also add in the new 'Standard Oil Monopoly" of today.

In 1911, John D. Rockefeller' Standard Oil monopoly was busted up. So, what is happening now? All these oil companies are allowed to recombine. Monopolies are used to screw us - the consumer. It should be obvious - $3.00 /gallon

Link: http://www.bellevuelinux.org/standardoil.html

Or Search= standard oil monopoly

[elehhhhna]

21. Hasn't Hawaii already done so?

[Lefty48197]

22. Better idea: Nationalize the entire petroleum industry

Allow independent, or chain retailers, but "We the People" should own all the refineries and the distribution systems. Operate the industry non-profit. That would probably knock down the price of oil about 40% these days. It would also eliminate all the market manipulation that they use to boost profits further.

[DemocratSinceBirth]

27. How Can We Nationalize What We Don't Own. ?

Over ninety percent of the oil in the world comes from beyond our shores...

[SoCalDem]

30. Price controls may be an alternative when gas costs "enough"

They aren't done gouging us yet:(

[dflprincess]

37. Hypno Toad - if you keep talking like that

Pat Robertson will add you to his hit list!

At the very least, we should see a windfall profits tax.

[geomon666]

38. Because nothing must affect the flow of capital

We need to reform our legal systems so the people, on the one hand, can get justice. On the other hand, the justice system doesn't affect the flows of capital.

[lumpy]

39. Gas rationing ?

Hey, we're at war doncha' know and the supply is running low. Gas was rationed during WW2. Well, of course we can ration ourselves.

[Yupster]

41. If we had price controlls on gas, then

hy wouldn't the oil companies just sell the gas to Europe or Japan where there aren't price controls? They are going to sell it to whoever pays the most aren't they?