Ban on ‘Excessive’ Gas Prices Heading for House Vote

[rahl]

The price of your product or service has little, if anything, to do with the cost of it. It is all about supply and demand. Where were your tears when the oil companies were getting slaughtered in year after year of brutal losses?

lol, wow

 

[fair minded]

I will try to explain this simple answer to you.

When there is an oil/gasoline shortage one of two things happens.

The first is that the price will rise. And yes, some who have the gasoline will gouge.

If you want gasoline, you will have to pay what it is worth. The price will be high, but there will be gasoline to buy.

The second thing that can happen is that the government tries to help.
They might freeze the price as some here suggest. If you do that, the oil/gas will still find its way to a place where the seller can get the most profit.

This will cause an even larger shortage. Long lines will become normal.

If you were buying gasoline in the 1970s, you know how bad that was.
lf you have a brain you should understand how the simple laws of supply and demand work.

Now, if there is extra oil/gasoline the seller either sells at a small profit or he can't sell at all.
Everyone cuts prices in hopes of at least selling their gasoline before their next shipment comes in. (They have contracts to buy a tanker full of gas every so often.)

They may be forced to pay a penalty fee if they can't accept the new gasoline so you have to sell the last load.

It is not uncommon for a gas station owner to lose money during times when we have too much gas.

If you understand any of this you know that it is best to try to get the price of gas to remain stable.

When the price of gas went down to a little over a dollar, everyone with a brain understood that there would be a shortage soon because the drilling rigs would shut down.

 

[Volunteer]

My problem with gas prices is not that they are high. It's that companies are legally allowed to profit on a massive scale. Gas and oil are not sustainable industries. The sooner we can transition to renewable sources the better.

 

[jonny5]

My problem with gas prices is not that they are high. It's that companies are legally allowed to profit on a massive scale. Gas and oil are not sustainable industries. The sooner we can transition to renewable sources the better.

Why do you think companies profiting is a problem? Or that gas and oil is not sustainable? Weve been using oil products for thousands of years, modern oil for over a century. Proven reserves have tripled in the last 40 years.

And what about all the things made with petroleum? WHich is basically everything. Youre reading and posting on this forum using a keyboard made of oil, through network devices made of oil, made on machines made of oil, using power generated by oil. And on and on? Hows your tree going to connect to the internet?

 

[TU Curmudgeon]

CNQ is another company HQ'd in Calgary. Primary listing agent is again the TSX. They are another example of a pure Canadian Company. Who owns the outstanding shares isn't how you measure the nationality of the company, you look at where there HQ is, their tax filings, the bulk of their employees. No one looks at a company and breaks down their ownership to the individual share and apportions ownership around the world. That's idiotic.

Obviously you are not quite familiar with how corporate directorships work.

If you had a company that was registered in the US, operated solely in the US, and had its corporate HQ in the US, but which had all of its shares owned by Vladimir Putin - according to your version of reality, it would be "An **A*M*E*R*I*C*A*N** Company". Suuuuuuuurrrrrrrrrrrrrrreeeeeeeeeeeeeeeee it would.

By that definition there is likely *no* real Canadian company. The hard truth is that Canada doesn't have enough money collectively to own major assets entirely. The US as a whole has so much more investment capital than Canada that effectively Americans will always be larger shareholders in pretty much every company than Canada.

Which has what to do with the fact that American corporate directors are CHOOSING to raise prices (even though their costs have not risen) simply because they can?

Great, so you are throwing a tantrum about a subject you have zero actual knowledge of? Rather typical for you.



Ok, do housing prices *have* to go up? What if someone bought a house in downtown Vancouver or Toronoto 150 years ago and it passed down through their family since then? Should they sell it for the $100 that the original family member bought it for in 1870? No. Everything in the world is sold for the highest price you can get for it. Whether we are talking about oil, labor, real estate, investments, or finger paintings. It is all the same. If you have 10 widgets to sell, you sell them at the best prices you can get for those widgets, period, full stop.

No, you choose the price that you sell them for. That may, or may not, be the highest price that they would bring because you might have other reasons for setting the price - like being disposed to favour a particular purchaser. In the legal trade there is what is known as the "FOAD Price" that you quote the clients that you really don't want to deal with (for whatever reason). If the client accepts that price, then you work for them. If the client complains that you are charging someone else less, then you simply tell them to either pay what they were quoted or "Find Other Alternative Dealers"

Another intellectual rebuttal. Glad to see you are capable of having an actual debate on an introductory level econ topic.

Now shoo.

 

[bave]

Obviously you are not quite familiar with how corporate directorships work.

If you had a company that was registered in the US, operated solely in the US, and had its corporate HQ in the US, but which had all of its shares owned by Vladimir Putin - according to your version of reality, it would be "An **A*M*E*R*I*C*A*N** Company". Suuuuuuuurrrrrrrrrrrrrrreeeeeeeeeeeeeeeee it would.

Having been on a number of boards, I think I have a decent grasp on how they work. Companies often appoint directors from all over the world based on expertise. There are however significant rules about concentrated ownership and regulatory requirements long before you effectively launch a hostile takeover as you are describing. So the idea that Putin is going to sneakily buy up the majority of a highly valued enterprise is comically ignorant, but what's new with you.

Which has what to do with the fact that American corporate directors are CHOOSING to raise prices (even though their costs have not risen) simply because they can?

Hi, I'm capitalism, have we met? Evidently not. For the third time, how you price your goods/services isn't related to your cost.

No, you choose the price that you sell them for. That may, or may not, be the highest price that they would bring because you might have other reasons for setting the price - like being disposed to favour a particular purchaser. In the legal trade there is what is known as the "FOAD Price" that you quote the clients that you really don't want to deal with (for whatever reason). If the client accepts that price, then you work for them. If the client complains that you are charging someone else less, then you simply tell them to either pay what they were quoted or "Find Other Alternative Dealers"

How rare is it for someone to sell an asset for anything less than the best offer? Incredibly. When you are talking about service arrangements which involve interactions and relationships then there is a pricing difference but that is because you aren't comparing apples to apples. I worked in finance most of my career, we had asshole taxes all day long on certain people. If I didn't like dealing with the person they got dinged for a multiplier on fees. If they didn't pay it, I was fine with it, if they did, I was fine with it. You can't compare that fee arrangement to an established amicable client relationship because they aren't the same. That's how pricing works.

 

[TU Curmudgeon]

Having been on a number of boards, I think I have a decent grasp on how they work. Companies often appoint directors from all over the world based on expertise. There are however significant rules about concentrated ownership and regulatory requirements long before you effectively launch a hostile takeover as you are describing. So the idea that Putin is going to sneakily buy up the majority of a highly valued enterprise is comically ignorant, but what's new with you.

Obviously you missed school the day they taught "illustrative examples".

Hi, I'm capitalism, have we met? Evidently not. For the third time, how you price your goods/services isn't related to your cost.

Absolutely. It is related to your ethics and sense of responsibility. That is why some pharmaceutical companies charge multiple thousands of times more for their product than it actually costs to manufacture then (even when you factor in development costs).

How rare is it for someone to sell an asset for anything less than the best offer? Incredibly.

Not really.

When you are talking about service arrangements which involve interactions and relationships then there is a pricing difference but that is because you aren't comparing apples to apples. I worked in finance most of my career, we had asshole taxes all day long on certain people. If I didn't like dealing with the person they got dinged for a multiplier on fees. If they didn't pay it, I was fine with it, if they did, I was fine with it. You can't compare that fee arrangement to an established amicable client relationship because they aren't the same. That's how pricing works.

 

[bave]

Obviously you missed school the day they taught "illustrative examples".

You must have missed a whole lot of days of whatever education you think you received. All I see in your writings is blissful ignorance surrounded by a fanatical view. Usually a great combo.

Absolutely. It is related to your ethics and sense of responsibility. That is why some pharmaceutical companies charge multiple thousands of times more for their product than it actually costs to manufacture then (even when you factor in development costs).

Speaking of illustrative examples of idiocy. You are failing to factor in the failed drugs and sunk R&D costs. A pharma company has to pay for all their failed drugs as well and there are a whole lot more of them than their are successes. Then you have to defend against numbskulls and their nuisance lawsuits. It isn't just the cost of making the pill you are paying for, I realize that is too complex for you, but there is more to it than that. This is why many major pharma companies have net margins around utilities.

Not really.

Sure, lol.

Why don't you send me the names of anyone you know who wants to sell an asset for less than it is worth. You realize how stupid that sounds?

 

[TU Curmudgeon]

You must have missed a whole lot of days of whatever education you think you received. All I see in your writings is blissful ignorance surrounded by a fanatical view. Usually a great combo.



Speaking of illustrative examples of idiocy. You are failing to factor in the failed drugs and sunk R&D costs. A pharma company has to pay for all their failed drugs as well and there are a whole lot more of them than their are successes. Then you have to defend against numbskulls and their nuisance lawsuits. It isn't just the cost of making the pill you are paying for, I realize that is too complex for you, but there is more to it than that. This is why many major pharma companies have net margins around utilities.

Indeed, the drug companies DO spend a whole lot of R&D money trying to develop ways to manufacture similar drugs that are already in successful production without infringing on the patents held by the producers. That doesn't produce any NEW drugs. (BTW, the estimate of how much of their R&D money is spent on attempting to circumvent someone else's patents is 80+%.)

Sure, lol.

Why don't you send me the names of anyone you know who wants to sell an asset for less than it is worth. You realize how stupid that sounds?

Indeed, it does sound "stupid" to someone who places profits ahead of anything else.

 

[bave]

Indeed, the drug companies DO spend a whole lot of R&D money trying to develop ways to manufacture similar drugs that are already in successful production without infringing on the patents held by the producers. That doesn't produce any NEW drugs. (BTW, the estimate of how much of their R&D money is spent on attempting to circumvent someone else's patents is 80+%.)

Spin and pivot, eh? Look at the K's and Q's of any public pharma company, you can see specifically their pipeline progress, spending, successes and failures. That's all public information. The idea that they are spending the vast majority of their funding on copy-catting and circumventing patents is comically false. If you believe it is, I encourage you to report them to the IRS and SEC, there is a huge whistleblower reward.

Indeed, it does sound "stupid" to someone who places profits ahead of anything else.

There are over 100 billion transactions you can easily view daily that show people unwilling to sell assets for less than they are worth (the NYSE/NYMEX/NASDAQ alone). People don't sell $20 bills for $10. If you have a source of data that says this occurs frequently, post it up or just admit you are making things up to flail your way through a debate.

 

[TU Curmudgeon]

Spin and pivot, eh? Look at the K's and Q's of any public pharma company, you can see specifically their pipeline progress, spending, successes and failures. That's all public information. The idea that they are spending the vast majority of their funding on copy-catting and circumventing patents is comically false. If you believe it is, I encourage you to report them to the IRS and SEC, there is a huge whistleblower reward.

There is absolutely nothing illegal about attempting to find a way around someone else's patents.

There are over 100 billion transactions you can easily view daily that show people unwilling to sell assets for less than they are worth (the NYSE/NYMEX/NASDAQ alone). People don't sell $20 bills for $10. If you have a source of data that says this occurs frequently, post it up or just admit you are making things up to flail your way through a debate.

When you look ONLY at the transactions where the PRIMARY goal is to "make money", you are not going to be finding very many transactions where the sale price is less than the maximum obtainable.

When you look at transactions where the primary goal is to help others, you are not going to be finding very many transactions where the maximum cash profit is screwed out of everyone who is in need.

I quite understand that you are one of those whose SOLE preoccupation is amassing as much money in as short a time as possible (and to hell with the consequences that befall anyone else) - but not everyone falls into that category.

If you think that I am a fool for preferring to help others rather that scrambling to enrich myself to the very last penny available, even if that means that I suffer some loss and/or inconvenience, I will wear that hat gladly.

 

[bave]

There is absolutely nothing illegal about attempting to find a way around someone else's patents.

There is if you don't properly account for it and disclose it, hence the SEC/IRS. What you are alleging is not found on any of their public filings, so if you have evidence to support your claim you can blow up 20+ major US corporations with the drop of a dime.

When you look ONLY at the transactions where the PRIMARY goal is to "make money", you are not going to be finding very many transactions where the sale price is less than the maximum obtainable.

Ok, cite the data.

When you look at transactions where the primary goal is to help others, you are not going to be finding very many transactions where the maximum cash profit is screwed out of everyone who is in need.

Ok, cite the data.

I quite understand that you are one of those whose SOLE preoccupation is amassing as much money in as short a time as possible (and to hell with the consequences that befall anyone else) - but not everyone falls into that category.

Ok, cite the data.

If you think that I am a fool for preferring to help others rather that scrambling to enrich myself to the very last penny available, even if that means that I suffer some loss and/or inconvenience, I will wear that hat gladly.

There is a huge difference in charitable activities and donations and selling assets for less than their value. If you are trying to help people you *give* them assets, you don't give them a discount. The only time people sell assets for less than their value is because they have some sort of other reason to do so. They are either in a sham transaction, back door gifting to family or friends, or distressed and other issues are at play. If someone is trying to be a good person, they gift assets.

Yet again you make a fool of yourself.

 

[RealityNow]

Under unrestrained, free market, capitalism there is no such thing as "excessive profit" because the supplier has the absolute right to charge whatever they can convince the market to pay.

Why are you attacking the very basis of the American economic system? I mean that cell phone that you paid $800 for probably cost at least $20 manufacture so, given a "reasonable" level of profit (let's say 50%) at each level (which includes advertising as a level) it should sell for around $150 and the remaining $650 being profit.

Should that "excessive" profit be prohibited as well?

YES....

America NEEDS PRICE REGULATIONS... because the history of the American Business Man... is and has been based on GREED BY ANY MEANS. They do nothing but "Erode the Purchasing Power of Denominational Currency... AND then spin a series of lies to try and maliciously justify their "GREED".

Every other high producing country can do so, and they do so, where their people can afford to buy what they produce and what they need. They know how to control their Inflation and they don't have a problem "PROSECUTING" their Greed Driven Corporate Executives.

American Business Men have had criminal pricing madness, since the days of "segregation" where they charged blacks more for products, charged higher interest rates, and then "devalue assets held by black people"....

• When the Housing Bankruptcy was happening in 2007-2010.... White people were given Chapter 7, and soon after were given access to more credit, Black people were given Chapter 13.... and denied Chapter 7.

 

[bave]

YES....

America NEEDS PRICE REGULATIONS... because the history of the American Business Man... is and has been based on GREED BY ANY MEANS. They do nothing but "Erode the Purchasing Power of Denominational Currency... AND then spin a series of lies to try and maliciously justify their "GREED".

Every other high producing country can do so, and they do so, where their people can afford to buy what they produce and what they need. They know how to control their Inflation and they don't have a problem "PROSECUTING" their Greed Driven Corporate Executives.

lolololol.

I can't tell if this is meant to be funny or just is funny.

 

[RealityNow]

lolololol.

I can't tell if this is meant to be funny or just is funny.

Read with honestly motivations and if you apply comprehension and understanding, you will figure it out.

 

[Mongidig]

I do not feel comfortable with Democrats in charge during times like this.

 

[bave]

Read with honestly motivations and if you apply comprehension and understanding, you will figure it out.

Figure it out? I can't even tell what you are trying to say here. Is english your first language?

 

[The AntiDonald]

Price gouging is already illegal.

But then, no one expects these dimwits to know that.

That isn't stopping people and corporations for doing it. There are recordings of big co. CEOs bragging about their huge profits and jumping on the bandwagon.

Oil companies are reporting profits 3 times larger than pre-Covid. And we're just not talking about a few million. The average quarterly profit for a company like Exxon or Shell is roughly 3 billion every 3 months. They are currently showing profits in the 8-9 billion profit range. Fuel doesn't have to be this high. We're getting shafted.

 

[The AntiDonald]

I do not feel comfortable with Democrats in charge during times like this.

Put the GOP in charge, you will see higher taxes for middle and lower income, you will see more massive tax cuts for the ultra-wealthy, and a plan to phase out Medicare, Medicaid and Social Security. You will also see massive regulation cuts. Personally, I like breathing clean air.

 

[bave]

That isn't stopping people and corporations for doing it. There are recordings of big co. CEOs bragging about their huge profits and jumping on the bandwagon.

Oil companies are reporting profits 3 times larger than pre-Covid. And we're just not talking about a few million. The average quarterly profit for a company like Exxon or Shell is roughly 3 billion every 3 months. They are currently showing profits in the 8-9 billion profit range. Fuel doesn't have to be this high. We're getting shafted.

Bragging about high profits isn't abnormal, that's what companies do. Their profits are skyrocketing because their underlying product value exploded with demand relative to supply. The profits are bigger than pre-covid because pre-covid they were all struggling. There is no gouging, it is a globally competitive and transparent market.

 

[The AntiDonald]

Bragging about high profits isn't abnormal, that's what companies do. Their profits are skyrocketing because their underlying product value exploded with demand relative to supply. The profits are bigger than pre-covid because pre-covid they were all struggling. There is no gouging, it is a globally competitive and transparent market.

So, you see a quarterly profit of 3 billion dollars as struggling? Amazing. Why do you accept this? Because Biden bad?

 

[Mongidig]

Put the GOP in charge, you will see higher taxes for middle and lower income, you will see more massive tax cuts for the ultra-wealthy, and a plan to phase out Medicare, Medicaid and Social Security. You will also see massive regulation cuts. Personally, I like breathing clean air.

Both sides suck. I feel more like civilization is about to collapse under the Democrats. They need to drop their little foo foo ambitions during times like this. The Republicans need to tax the rich and not mess with the Meds and Social Security.

 

[The AntiDonald]

Both sides suck. I feel more like civilization is about to collapse under the Democrats. They need to drop their little foo foo ambitions during times like this. The Republicans need to tax the rich and not mess with the Meds and Social Security.

What you're advocating for is exactly what the democrats want to do. With a 60-vote threshold in the senate, and people like Manchin, it will never happen. If the GOP returns to power, it certainly will not happen, just the opposite.

 

[cpwill]

Actually it is a simple recognition that the directors of companies have a legal (fiduciary) duty to their shareholders to maximize profits REGARDLESS of any "unintended consequences to third parties".

No, it is a recognition of economic reality in a marketplace - specifically, in a global marketplace. Recommended Reading.

The first is just plain silly while the second is actually a sound philosophical position.

The Labor Theory of Value is so disconnected from reality that even Lenin abandoned it. It belongs right up there with "price caps won't produce shortages" and "all the food industry needs is centralized government control"

When you learn to read for comprehension I will most certainly do so.

However, let me clarify our positions.

[1] Your position is that the oil companies CAN increase prices and, therefore, they must.​

No. My position is that price is information - it signals demand - and that supply will respond to it.

and​

​

[2] My position is that oil companies CAN increase prices and, therefore, they MAY choose to do so (as well as choosing not to do so).​

Your position has been all over the map. First you claimed that supply was up and demand was down, and now you are shifting to a variation of "markets don't count".

They are free to ask whatever price they want, and the market will only bear what it will bear.

But if they sell at a markedly lower price in Location A, then secondary purchasers will buy up that stock and shift it to Location B where they can sell it for a higher price....

....which has pretty much been the basis for trade since mankind realized that large herd mammals could be used to haul goods.

It's also the "call of the compassionate patriot".

Yeah. They call it "Corporatism" or sometimes "Socialism in One Nation". Nationalism and Socialism. Socialism and Nationalism. Poisonous Peanut Butter and Poisonous Chocolate.

Quite right,
PRICE = cost of production + whatever profit can be squeezed out of the market.

Price is a function of supply and demand, and does not always reflect the cost of production. At one point the cost of a barrel of oil went negative; do you think that means that the price of production went negative?

The issue is which is increasing faster extraction or demand.

You attempted to claim that supply was up and demand was down - and that turned out to be incorrect.

Then you argued that our raw production was greater than our processing capacity, creating a choke point - and that turned out to be correct.

And now you are trying to goal shift to this?

Exactly. If the oil companies were limited to a profit of X% in "Country A" AND were free to export their oil to "Country B" where they could make a profit of 2X% then they would do so REGARDLESS of the effect on "Country A". That, however would not change the cost to the oil company of producing a barrel of oil by one thin dime.

It would merely create an entire class of merchants busy purchasing gas in Country A to sell it in Country B.

"Price Caps" are not my idea.

That is precisely the idea you are pushing - autarky and price caps, which for some reason, you think, will reduce the price of gas in the United States, instead of merely creating shortages.

BTW, the largest experiment that the US had with price caps was during the period from 1941 to 1946 and that went very well.

It created massive shortages across the economy, and we were forced into a government rationing system for things like milk. Forgive the rest of us if we don't look at reimposing that as an example of something that has gone "very well".

 

[cpwill]

See previous post.

Previous post did not demonstrate that oil market was not a global market.

If that only applied when "Company A" LOWERED its prices, I'd have no difficulty in agreeing that the oil companies are actually competing (on anything other than the advertising slogan level).

It does occur when each company lowers its prices. Any gas station around here still charging $4.05 a gallon when everyone else is charging $3.70 is going to die.

Of course it "impacted American oil prices. The oil companies jumped at the chance to raise prices while leaving their costs unchanged.

I have no doubt they need profits to help them recover from the massive losses they took in the pandemic, however, no, the fact that higher demand and lower supply results in higher prices is not the result of a moral failure - it is an economic reality. Trying to find a Bad Guy for that function is like blaming the crop failure on the King's disrespect of the Gods, or hurricane katrina on homosexuals.

Yes, as demand rose, demand rose. Just as in 2020, when demand fell, demand fell. There was a point in time when the price of a barrel of oil went negative.

Oh PIFFLE.

On Monday, for the first time on record, West Texas Intermediate (WTI), the U.S. oil benchmark, plunged below zero and into negative price territory.

....do you actually bother to look up anything about this topic?

It appears that you don't quite understand how "generally accepted standard accounting practices" can be used to produce a loss when income actually exceeds expenses.

Yeah . Losses Don't Count But Profits Do. Okay

The Oil Companies made up the lockdowns. They just made them up. They never happened - you may have thought that you and your neighbors spent months (or years) not driving to work every day or driving your kids to school every day, or driving on those long summer vacations, but, you figured it out! Really, all that was just a darn ole Oil Company Accounting Trick.

Indeed the sellers are in <SARC>competition</SARC>.

They are indeed. So are the purchasers. That's how a market works.