Price Gouging?

General Forums Prince Rupert Forum
1

[quote]Report backs up claims of gas price-gouging

By Leanne Ritchie
The Daily News

Friday, September 30, 2005

The recent spike in gas prices constitutes nothing short of price-gouging on the part of the oil industry, according to a recent report. And that includes the summer price increase in Prince Rupert that left motorists forking over more than twice what they should have if the increase at the pumps was based on crude oil prices alone.

According to an analysis by economist Hugh Mackenzie, released earlier this week by the Canadian Centre for Policy Alternatives, the Canadian oil industry has been taking advantage of public fear prompted by the devastating hurricanes in the U.S. and charging more than what was justified by the increase in raw material costs…
[/quote]

Yeah, we’ve pretty much figured that out.

From the quoted report:

[quote]A 7.9-cent increase would have matched the crude oil
price increase. The 15-cent increase we’re now paying
is profiteering. And the 40-cent increase we were
paying over the Labour Day weekend was just plain
gouging.

In fact, Canadians already know what $100 a barrel oil
is like — we were paying a price equivalent to $110 a
barrel oil on the Labour Day weekend.

What should the price be? What would it be if we
weren’t being gouged by the oil industry? Let’s figure
it out. Crude oil at $68 (U.S.) a barrel translates to 50
cents per litre (Cdn) at the pump. Normal refining and
marketing margins add 14 cents per litre. Provincial
taxes (Ontario) add 14.7 cents. The federal gasoline
tax adds 10 cents per litre, for a total of 88.7 cents per
litre. Add 6.3 cents for the GST, and that gives us 95
cents — which is what we should be paying.

And for that period around Labour Day, when the
difference between the price and what would have
been justified by crude oil prices was much greater — as
much as 45 cents per litre at the peak — the industry
was knocking down excess profits at a cool $49.5
million a day. Not a bad payoff from exploiting fear.
Now, to be fair to the industry, it doesn’t gouge us
all the time. Indeed, there is normally a pretty stable
relationship between crude oil prices and prices at the
pump. The chart below makes the point. It shows the
portion of the price of gasoline in Ontario in cents per
litre that could not be explained by crude costs, normal
refining and marketing margins, and taxes, from
January 2005 to mid-September.

The consistency of the pattern over the past nine
months makes the profit grab in August and
September all the more obvious.[/quote]

The chart:

2

Price gouging isn’t illegal. Mig, you want to argue again? Nah, lets not.

3

To be fair, I doubt it’s the local retailers profiting. They probably have the same margin they always have. But if they are forced to all buy from the same wholesaler (or sell on consignment), then there can really be no local competition on gas prices.

Nobody said price gouging was illegal. But price gouging is the opposite of competition :wink:

But it’s interesting that you now acknowledge the gouging, Ivan.

4

What about the part of your little graph that says, “competition drives price below costs”?

5

What about it?

6

My Granma used to say “Profiteering isn’t illegal. Tar and feathering the profiteers is illegal. See this clipping of great-Granpa and his friends getting hauled off to jail in 1916?”

In today’s corporate doublespeak, one would just look at the chart and explain it was a regular market correction to recover all those accrued negative returns in one weekend… I mean look how big the reduction has been in recent weeks, we’re getting (.05 / .30) like only 18% of what we did, you people are getting a real deal, how long do you consumers think this free ride is going to go on for at our expense?
(snort, glower, adjust knot on tie)

7

If I was going to complain about anything, it would be the tax. Buy marine fuel and put it in your car, they’ll never know.

8

But the tax hasn’t increased. Other than the GST, all the other tax components are flat litre-based taxes. The GST is based on the price, so obviously it will go up with the price. But it isn’t responsible for the increasing price. It reflects it.

But to blame the other taxes is crazy, they haven’t changed.

You agree there was (“legal”) gouging and profiteering, and, like you said, you don’t mind. It’s the thought that you’re paying taxes the bugs you? You’d rather give more money to the refineries (who increased their prices) rather than give anything to the government (who haven’t increased their taxes during this period)?

Greed is good, I guess.

But don’t confused greed and profiteering and gouging with “supply and demand” or “competition” – they’re not the same.

9

Here’s the PDF of the analysis:

tinyurl.com/8mrvm

10

[quote=“MiG”]But the tax hasn’t increased. Other than the GST, all the other tax components are flat litre-based taxes. The GST is based on the price, so obviously it will go up with the price. But it isn’t responsible for the increasing price. It reflects it.

But to blame the other taxes is crazy, they haven’t changed.

You agree there was (“legal”) gouging and profiteering, and, like you said, you don’t mind. It’s the thought that you’re paying taxes the bugs you? You’d rather give more money to the refineries (who increased their prices) rather than give anything to the government (who haven’t increased their taxes during this period)?

Greed is good, I guess.

But don’t confused greed and profiteering and gouging with “supply and demand” or “competition” – they’re not the same.[/quote]

Where did I say the tax increased?

I didn’t give money to anyone. My car is being worked on right now. I’m not a slave to my vehicle, so I have very little to complain about. Although my bike pedal did break off, perhaps from overuse. Damn those oil companies!

11

You’re not a slave to your car, but I’ll bet everything you need to live has been delivered on a truck. Your food, your clothes, your bike parts?

Try sending a package in the mail lately? Why are they charging a “fuel surcharge?” Or how about a flight? See any great deals lately?

You like your groceries costing more because some oil company decided that “supply and demand” wasn’t enough?

You like your wages being worth less because of inflation? Because that’s what’s happening so that the oil companies can legally gouge consumers.

You need to see more than just your own life, Ivan.

Let’s hope you never complain about how little you get paid or how much anything costs, because this increase in gas prices has directly impacted both.

[quote=“Stats Canada”]In August, consumers paid 2.6% more than in August 2004 for the goods and services included in the Consumer Price Index (CPI) basket, up strongly from the 2.0% increase recorded in July. However, the 12-month change in the All-items index excluding energy rose more moderately from 1.4% in July to 1.6% in August.

Gasoline prices were the primary reason for the jump in the 12-month change in the All-items index. After rising 12.3% between July 2004 and July 2005, gasoline prices soared 20.1% between August 2004 and August 2005.[/quote]

Wait until we get the September and October numbers and you’ll see how much the ripple-effect of “legal” gouging will be on your paycheck and your expenses.

12

It cost me $7 more to drive to my dentist appointment in Sept. than it did in July. It now costs all our local customers $5 an hour more for onsite service to cover the gas to get there.
I also noticed suppliers now charge $20 instead of a $10 flat shipping fee, and the ‘free shipping’ from others is now on a $500 minimum order instead of a $300 minimum order.
There have been major trucker disruptions over the price of fuel, and they were all just settled before the last spike in prices so any gain by the truckers was instantly wiped out. They’ll want to recoup that.
The effects are already happenning, and these extra costs have a way of becoming incorporated so they never disappear even if gas prices should go down.

13

[quote=“MiG”]You’re not a slave to your car, but I’ll bet everything you need to live has been delivered on a truck. Your food, your clothes, your bike parts?

Try sending a package in the mail lately? Why are they charging a “fuel surcharge?” Or how about a flight? See any great deals lately?

You like your groceries costing more because some oil company decided that “supply and demand” wasn’t enough?

You like your wages being worth less because of inflation? Because that’s what’s happening so that the oil companies can legally gouge consumers.

You need to see more than just your own life, Ivan.

Let’s hope you never complain about how little you get paid or how much anything costs, because this increase in gas prices has directly impacted both.

[quote=“Stats Canada”]In August, consumers paid 2.6% more than in August 2004 for the goods and services included in the Consumer Price Index (CPI) basket, up strongly from the 2.0% increase recorded in July. However, the 12-month change in the All-items index excluding energy rose more moderately from 1.4% in July to 1.6% in August.

Gasoline prices were the primary reason for the jump in the 12-month change in the All-items index. After rising 12.3% between July 2004 and July 2005, gasoline prices soared 20.1% between August 2004 and August 2005.[/quote]

Wait until we get the September and October numbers and you’ll see how much the ripple-effect of “legal” gouging will be on your paycheck and your expenses.[/quote]

Increased delivery costs are negligible for the food I purchase. No flights taken, no mail sent. I occasionally buy second-hand clothes from Value Village and no complaints there either. You’d be surprised at how reliable a bicycle is. I rarely need to purchase parts, although the tires can be pricey.

I also find it hard to believe that my wages will decrease based on a few weeks of increased oil prices. Maybe you have a graph that will illustrate your point, as you certainly seem to have one for everything else. Besides that, maybe I’ll make more money when people start switching to electric heat. Supply, demand, and all that jazz.

14

You know what’s funny? I actually made money on my oil investments in the wake of Katarina. Oh no, not an extra dollar on my grocery bill! Mig, try to imagine your money flying into my pocket. Haw haw.

15

oh man… im not too worried… i still only pay a buck a litre. When it gets upto
1.1/L then i might be upset, but im not gunna loose sleep over it. I mean, if you’re that worried about gas, try not to drive whenever possible. I guess theres really nothing you can do if your job requires you to drive, but instead of going for a pointless cruise, go for a walk.

16

http://hackingthemainframe.com/coppermine/albums/userpics/11583/bees.gif

17

[quote=“herbie_popnecker”]It cost me $7 more to drive to my dentist appointment in Sept. than it did in July. It now costs all our local customers $5 an hour more for onsite service to cover the gas to get there.
I also noticed suppliers now charge $20 instead of a $10 flat shipping fee, and the ‘free shipping’ from others is now on a $500 minimum order instead of a $300 minimum order.
There have been major trucker disruptions over the price of fuel, and they were all just settled before the last spike in prices so any gain by the truckers was instantly wiped out. They’ll want to recoup that.
The effects are already happenning, and these extra costs have a way of becoming incorporated so they never disappear even if gas prices should go down.[/quote]

Twenty instead of ten? Sounds like profiteering to me. That can’t be justified through increased gas prices alone. You should complain a lot.

18

I’ve kicked, punched, stomped, and licked hornet’s nests. Stirring is nothing for me.

19

[quote=“Ivan”]Increased delivery costs are negligible for the food I purchase. No flights taken, no mail sent. I occasionally buy second-hand clothes from Value Village and no complaints there either. You’d be surprised at how reliable a bicycle is. I rarely need to purchase parts, although the tires can be pricey.

I also find it hard to believe that my wages will decrease based on a few weeks of increased oil prices. Maybe you have a graph that will illustrate your point, as you certainly seem to have one for everything else. Besides that, maybe I’ll make more money when people start switching to electric heat. Supply, demand, and all that jazz.[/quote]

Thanks for making my point.

Yes, I’ve probably profited more than you have from the rise in both oil and gas prices. Most of my gas is tax-deductible as well. So it doesn’t really hurt me at all. I’m probably better off than you. That doesn’t mean I don’t give a shit about the economy, about inflation, about the rest of the world.

This whole debate says a lot more about you, Ivan, than it does about gas prices.

Yes we know you’re ok, yes we know you can’t seem to see how everybody in the world isn’t like you. You don’t need to keep repeating it.

Here’s a definition for you, and this time you won’t have to go look it up:

[quote]adj.

  1. Holding the view that the ego is the center, object, and norm of all experience.
  2. a. Confined in attitude or interest to one’s own needs or affairs.
    b. Caring only about oneself; selfish.
  3. Philosophy
    a. Viewed or perceived from one’s own mind as a center.
    b. Taking one’s own self as the starting point in a philosophical system.[/quote]

It’s weird, because the Ivan I know isn’t like that at all. So perhaps I’ve been expertly trolled.

20

Guess who this one’s for?

http://bowland-files.lancs.ac.uk/chimp/langac/LECTURE3/peanuts2.jpg