Government "Price Gouging" At The Pump
"Speaker Pelosi is "particularly concerned" that the highest price of gasoline recently was in her San Francisco district — $3.49. So she endorses HR 1252 to protect consumers from "price gouging," defined, not altogether helpfully, by a blizzard of adjectives and adverbs.
Gouging occurs when gasoline prices are "unconscionably" excessive, or sellers raise prices "unreasonably" by taking "unfair" advantage of "unusual" market conditions, or when the price charged represents a "gross" disparity from the price of crude oil, or when the amount charged "grossly" exceeds the price at which gasoline is obtainable in the same area.
The bill does not explain how a gouger can gouge when his product is obtainable more cheaply nearby. Actually, Pelosi's constituents are being gouged by people like Pelosi — by government. While oil companies make about 13 cents on a gallon of gasoline, the federal government makes 18.4 cents (the federal tax) and California's various governments make 40.2 cents (the nation's third-highest gasoline tax). Pelosi's San Francisco collects a local sales tax of 8.5 percent — higher than the state's average for local sales taxes.
Pelosi and others just know, evidently intuitively, what the "fair" price of gasoline is."
From today's column by George Will.
2 Comments:
I agree with the majority of the statement made. The only thing I don't understand is why gas prices have gone up recently when the price of a barrel of oil has remained flat. The excuse for this involves constraints on refining capacity but, as far as I know, the demand for gasoline has not dramatically YOY.
Combined with refinery outtages and increased demand we are unable to service our summer surge in demand for gasoline. As such, there is a need to attract gasoline imports from overseas, which requires a price premium. Similarly, as this is abnormal, the draw of gasoline away from foreign markets has driven up the price of foreign gasoline supplies, which must be added to the attraction premium.
The only solution is reduced demand or increased refining capacity, both of which are produced by high prices.
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