When Da Missus and I first moved to Oklahoma (October, 2020), the gas prices for unleaded at the truck stop across the street (right next to the I-40 offramps, and we all know that gas near the freeways is more expensive than elsewhere in town) was $1.739/gallon. The election was a few weeks later.
Yesterday, at a gas station at least two miles from any freeway, it was $3.599. It has literally more than doubled, right in the middle of the domestic oil and natural gas fields. (Up more than 40 cents in the last week, to boot.)
Went from $4.06 to $4.59 while I was at work Friday. Haven’t been out this weekend so I don’t know what’s it’s climbed to now. I know it’s gonna cost me $500 more to heat my house for the next 2 months than it has for the last 2. Haven’t figured out how the gas in the storage tank that’s already been paid for gets more expensive just sitting there.
It's the same reason hotel/motel rooms change costs from day to day, spiking on the weekends, even before the tourists start showing up, or even without knowing how many tourists will actually show up -- expectation of shifts in Supply and Demand. If the market is allowed to work properly, people will see higher prices at those gas pumps, even though that gas has already been paid for, and buy less, leaving some for others that follow. Same with hotel rooms in tourist towns or when dealing with mass refugees (say from a hurricane) - people will sleep two-four to a room, rather than paying more to allow everyone to have their own rooms, which leaves more rooms available.
When the prices spike for consumables (water bottles, gas, etc.), the higher prices help entice in supplies from the outside from suppliers who have already paid for their supplies and are eager to get the higher prices, while simultaneously easing the supply shortage that caused the crisis in the first place. Price caps prevent such enticements, making sure that no one is interested in shipping their supplies into a potentially dangerous area if they can make the same profits sitting safely at home.
When Da Missus and I first moved to Oklahoma (October, 2020), the gas prices for unleaded at the truck stop across the street (right next to the I-40 offramps, and we all know that gas near the freeways is more expensive than elsewhere in town) was $1.739/gallon. The election was a few weeks later.
ReplyDeleteYesterday, at a gas station at least two miles from any freeway, it was $3.599. It has literally more than doubled, right in the middle of the domestic oil and natural gas fields. (Up more than 40 cents in the last week, to boot.)
Went from $4.06 to $4.59 while I was at work Friday. Haven’t been out this weekend so I don’t know what’s it’s climbed to now. I know it’s gonna cost me $500 more to heat my house for the next 2 months than it has for the last 2. Haven’t figured out how the gas in the storage tank that’s already been paid for gets more expensive just sitting there.
ReplyDeleteIt's the same reason hotel/motel rooms change costs from day to day, spiking on the weekends, even before the tourists start showing up, or even without knowing how many tourists will actually show up -- expectation of shifts in Supply and Demand. If the market is allowed to work properly, people will see higher prices at those gas pumps, even though that gas has already been paid for, and buy less, leaving some for others that follow. Same with hotel rooms in tourist towns or when dealing with mass refugees (say from a hurricane) - people will sleep two-four to a room, rather than paying more to allow everyone to have their own rooms, which leaves more rooms available.
ReplyDeleteWhen the prices spike for consumables (water bottles, gas, etc.), the higher prices help entice in supplies from the outside from suppliers who have already paid for their supplies and are eager to get the higher prices, while simultaneously easing the supply shortage that caused the crisis in the first place. Price caps prevent such enticements, making sure that no one is interested in shipping their supplies into a potentially dangerous area if they can make the same profits sitting safely at home.
And it's going to get worse. Quite a bit worse.
ReplyDelete