Re: Price Gougeing



I have never heard of a business purchasing a product for a certain price and then selling it for the same price. That business would not stay in business for long. People are in business to make a living or profit.
Brian
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Brian , you are right my point is this, the gas stations say they only make pennys of profit per gal, I think they are making 100% profit, on a certain amount of the gasoline in there tanks, if you read my first post.
Tom

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said:

Markup is entirely different than profit. Profit is what's left over after ALL expenses, not JUST the cost of goods.
Economics 101.
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Larry J. - Remove spamtrap in ALLCAPS to e-mail

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Yeah, sort of like your own household finances. If you take home $60,000 per year, and you spent $54,600 during that year, your profit is $5,400. (That's about the same percentages as Exxon had last year, by the way.)
With this profit, you can pay off some of the mortgage, buy a new TV, go on a vacation, get your kid braces, fix the roof, build a fence, all sorts of stuff. That's what profit is for.
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said:

Not a perfect analogy, but close enough...

Some of the things you mention here are acually expenses, to be taken BEFORE your "profit" is calculated - such as building that fence.
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Depends on your jurisdiction. Canada does not allow mortgages, roofs, or fences as personal tax deductions. Even your kid's braces are not deductible if you make over about $25,000 per year net.
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TeGGeR

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I agree with you there Tom. We used to have regulation on gas prices here years ago. When the world price changed it took ninety days for that increase to be seen at the pumps (that was the time 'they' said it took for the old stock to be depleted). Then when the new stock entered the system, the price rose to reflect that fact. Now-a-days if someone sneezes or blinks the price changes (rises) immediately. It's not right at all.
Then again, 'they' say that they have to charge the increased price to be able to pay the increased price when their present stock is depleted, which makes sense. BUT, the only price that changes immediately when the world price of oil changes is when the price goes UP! When the world price drops the price at the pump does NOT reflect that price change immediately, or even in the weeks that follow the drop. In fact for an increase in the world price of a dollar a barrel, the price at the pumps here rises six to eight cents a litre. When the price drops a couple of dollars a barrel the price at the pumps drop a penny a litre.
I wish I owned stock in an oil company or two!
Brian
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Trudeau copied Nixon's wage and price controls in 1975. It was such a horrific mistake it was repealed later that year. Trudeau was such a dolt. He obviously did not learn anything from Nixon's own mistake two years before.
If Nova Scotia had its own price regulation, I'll bet your prices were far higher than provinces that did not.
I notice even now, you're paying about 25 more per liter than we are in Ontario. Your taxes must be higher (snicker).

Why not? Can you explain?
<snip>

You can easily do that through mutual funds. Oil companies are making pretty good money now (~10% net), but that could change in an instant, which is exactly what has happened in the past, and then they'll be down to 7% margins again.
An interesting chart:
http://www.tegger.com/hondafaq/misc/oilprice.jpg
Oil is still WAY cheaper than it was during Nixon's price controls. Reagan deregulated oil prices in 1982. See that price drop immediately thereafter?
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TeGGeR

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Trudeau was one of the worst things to have ever happened to Canada. We continue to suffer to this day and well into the future because of that man (seems a bit too nice a word to describe him).

I honestly say that I did not pay any attention to the rest of the country's prices at that time. Mainly because I was just too young to care and I didn't travel outside of the Maritimes at the time.

We're usually between 15 and 20 a litre higher than the price in Ontario. I believe we need to build a pipeline from you to us, so that we can have some of that cheaper Alberta oil <g>.
On a more disheartening note, the radio staions here just announced that some gas stations are now selling regular self serve for 148.9 a litre.

It's just my feeling that we're being robbed and that it's legal to do it this way (with the government helping out as much as they can with the crime <g>).

I know, but I have to purchase some fuel today to go to work.

I have to say that, you and your very comprehensive site are thorough.
Brian
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Correct. If one cannot beat 'em, then join 'em. It's part of my financial strategy lately, hypocritcal as some of its aspects are. I rationalize that, as I drive my 40 mpg Honda Civic around town, while others drive incredibly wasteful trucks and SUVs, I may as well profit from their stupidity.
I don't understand the outrage here, myself. Dealers charge way more than independent shops. Medical fees vary just as much from one hospital or doctor to another. Etc.
There are important laws on price gouging, but I don't think they kick in at this point. These gasoline sales businesses are doing what the free market allows.
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