The Ayn Rand Institute has an informative article called The Myth of "Price-Gouging".
I don't really worry about price gouging. What I want to know about is price fixing.
There have been a lot of people in Ridgecrest for many years asking why our gas always seems to be some of the more expensive gas in the state. The next question people ask is why do all the stations in town charge the same price for gas. When one station raises it's price everyone else follows shortly.
There have been "investigations" in town before and they always conclude that there is no formal price fixing going on in town.
Using the information at California Gas Prices I was able to gather the following information:
Ridgecrest has 14 gas stations with the prices ranging from $3.34 to $3.39. If you drop out the one low station at $3.34 and the two high stations at $3.39, the other 11 stations in town are all charging the same price - $3.35.
But I'm sure thats just a coincedence.
Ignore the fact that a quick check of six other cities of about the same population as Ridgecrest shows:
| City Ridgecrest Blythe Eureka Lemoore Lincoln Suisun City Paradise | Population 25000 22000 26500 22500 22400 27300 26500 | No. Stations 14 8 18 7 7 13 6 | High Price 3.39 3.55 3.49 3.29 3.25 3.29 3.19 | Low Price 3.34 3.13 3.30 3.16 3.18 2.99 3.09 | Range 0.05 0.42 0.19 0.13 0.07 0.30 0.10 |
If you drop the high and low price stations from the mix, the shortest range of price differences you find is Lincoln which drops from 7 cents to 5 cents. The rest of the cities have ranges that run from 6 cents to 34 cents. None of them get close to Ridgecrest's range of zero.
Wow? 11 stations in town all charging the exact same price, with the other 3 stations within 4 cents. That's right, there's no price fixing going on here.
3 comments:
To really make your case David, you'ld need to identify the (number, at least) of gas wholesalers that supply the local stations. I think I recall it being a topic of mild concern back when that there are/were only two serving the area, basicly from Mojave right up to Bishop. If that's still the case, then there's your culprit. The stations charge the same price because they all pay the same price to their supplier.
I would certainly try to find out who supplies all the gas stations is town if I was really trying to make a case for price fixing. Mostly I'm just bitching and complaining. I don't buy into the price gouging complaints and I hate paying over $3 a gallon of gas and wanted something to rant and rave about.
If it walks like a duck, and quacks like a duck...
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