A gas increase again?!

Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 2:34 pm

It's always been interesting to me that people whine and complain about companies making a few percent on gas sales, but have no problem paying Apple and Samsung 300% margin for their cellphones.

It's just further proof that costs have nothing to do with prices. It's just how the market works.

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Re: A gas increase again?!

Postby RVThereYet » Mar 2nd, 2018, 2:54 pm

Jonrox wrote:It's always been interesting to me that people whine and complain about companies making a few percent on gas sales, but have no problem paying Apple and Samsung 300% margin for their cellphones.

It's just further proof that costs have nothing to do with prices. It's just how the market works.


... Or $2.75 or more for a 500ml bottle of water (double the price of gas for something you can get fro free out of tab) ... or the $5.50 cup of caramel macchiato at Starbucks... never mind popcorn at the movies... if people will pay it, they can and will charge it. We went to see Circle Del Soleil in Vancouver ... $14 for a bag of popcorn (not kidding!), and people (us included lol) were lined up buying it, captive audience I guess. The price is what the market will bear...
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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 3:35 pm

Jonrox wrote:It's always been interesting to me that people whine and complain about companies making a few percent on gas sales, but have no problem paying Apple and Samsung 300% margin for their cellphones.

It's just further proof that costs have nothing to do with prices. It's just how the market works.

Its always been interesting to me how people keep trying to compare apples with ground beef. The thing about the items people keep comparing fuel to have free competition. If you don't like the price that store A is selling their iPhone or Samsung or litre of milk for, theres always a store somewhere that sells it for less or is willing to give you extra perks. With fuel, there is no or little competition. If one vendor sells a litre of fuel for 113.9, all the other vendors in the city sell for the same price. When a vendor ups their price, all the other vendors in the city up theirs and match it as well. If Walmart is selling the latest and greatest Samsung for $199, Best Buy might be selling it for less or giving you a gift card to offset the price. That is the difference and that is where so many of the complaints stem from.
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Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 3:38 pm

It's always been interesting to me that people think some items aren't subject to the basics of economics.

People always whine and complain when the price of fuel goes up across multiple stations, but never seem to accuse anyone of collusion when prices all fall at the same time. They don't stop to think that maybe, just possibly, there are other market factors at play.
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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 3:41 pm

Jonrox wrote:It's always been interesting to me that people think some items aren't subject to the basics of economics.

Or those who think that gas shouldn't be subject to the basics of a free market :up:
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Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 3:46 pm

Gas prices will always gravitate towards one another, especially given the irrational buying behavior that a lot of people exhibit by driving across the city to save a penny or two (as an example).

It's a commoditized item, with little differentiation among suppliers. So while it may be slightly different than a lot of goods, will still see market price fluctuations that still adhere to basic economic principles. And because of the lack of difference in the item and buying experience, it's price will remain very similar across various sellers. There's no reason for it to be different, especially since it's the market driving the price.

It's more fun to complain about the collusion, but the collusion (whether it exists or not) is irrelevant. The price for gas will end up being consistent across vendors whether they talk about it together or not... eventually the market will drive them to the same price.

The free market for a commoditized item looks different than the free market for milk, hamburger, clothing, etc... but the market will always win out. Although the items you mentioned are also fairly commoditized, the buying experience is different across retailers and that demand for a certain experience can cause price differences.
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Re: A gas increase again?!

Postby slootman » Mar 2nd, 2018, 3:48 pm

If there were 30 businesses with huge lighted signs at the side of the highway advertising their iPhone price it's likely all 30 prices would be the same.

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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 4:24 pm

slootman wrote:If there were 30 businesses with huge lighted signs at the side of the highway advertising their iPhone price it's likely all 30 prices would be the same.

Really?

Lets do a quick comparison, shall we? Lets take a no term iPhone 8 64GB - Bell is selling it at $949, Telus is $950, Rogers is $929. The Samsung S8 64GB is going for $1034 at Bell, $1035 at Telus and $849 at Rogers. So right there alone, we already have a savings of $21 on the iPhone 8 and a savings of $186 on the Samsung. Going into plans, every vendor has different promotions going on all the time, gift cards, higher trade in values for the old phone, etc.

Not to mention why this is always such a stupid comparison is that a phone is a phone, they all do pretty much the same thing - so even though the iPhone 8 might cost $1000, you could get a comparable Samsung, or LG, or Sony, or Essential, or Alcatel, or Motorola, or Nokia, etc. for less (or vice versa) - just like gas, its all does the same job - but it doesn't matter which vendor, the price is always the same - Chevron, Esso, Petro Can, Shell, etc.
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Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 4:29 pm

The gas prices are the same because the market drives them to be the same. Not only do prices go up in conjunction, they go down in conjunction. Yet nobody gets all up in arms over accusations of collusion when prices fall in unison... why is that? And why do they fall in unison?
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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 4:30 pm

Jonrox wrote:The gas prices are the same because the market drives them to be the same. Not only do prices go up in conjunction, they go down in conjunction. Yet nobody gets all up in arms over accusations of collusion when prices fall in unison... why is that? And why do they fall in unison?

Because they never fall in unison - they trickle :132:

Interesting how this phenomenon of almost identical fuel prices isn't shared around the world. If you go to the US, almost every city is greatly varying prices across the board. Europe, same thing. Even many larger cities in Canada seem to have varying fuel prices from one end of town to the next :132:
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Re: A gas increase again?!

Postby Jonrox » Mar 2nd, 2018, 4:32 pm

If they do trickle, and we could argue that... why do they trickle? It's almost like there's some kind of force driving the price down. Could it be the market? Or is it a case that the market is only capable of working in one direction?

A trickle could actually be evidence of market forces at play, rather than collusion. So which is it?
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Re: A gas increase again?!

Postby CapitalB » Mar 2nd, 2018, 4:32 pm

I was always under the impression that gas stations were all on the same pricing list, that updates at the same times. Each chain is probably supposed to change their prices a little bit after that. I could even see some chains having rules about what times they're allowed to change prices which would explain the occasional station that lags behind, perhaps they missed their price change window.
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Re: A gas increase again?!

Postby CapitalB » Mar 2nd, 2018, 4:34 pm

I would also imagine the spiking upwards of prices and the slow trickling down is part a reactionary measure and part a method of easing frequent fluctuations. I think people would get more angry if the prices went up and down 10 cents every few days than if they went up 10 cents, slowly dropped back down, maybe spiking back up a few cents over the ease off.
So much of the violent push-back on everything progressive and reformist comes down to: I can see the future, and in this future I am not the centre of the universe and master of all that I survey, therefore this future must be resisted at all costs.
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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 4:36 pm

Jonrox wrote:If they do trickle, and we could argue that... why do they trickle? It's almost like there's some kind of force driving the price down. Could it be the market? Or is it a case that the market is only capable of working in one direction?

A trickle would actually be evidence of market forces at play, rather than collusion. So which is it?

Market drive effects the whole market - not just a select few areas of it. If the market drove a steep increase across the board, then yes - you'd have an argument - but when it only effects the retail price here and there and everyone else is immune to the effects - then it gets a bit more complicated then market drive :up:
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Re: A gas increase again?!

Postby Dizzy1 » Mar 2nd, 2018, 4:54 pm

Current gas prices ...

Las Vegas - 2.49/g to 2.84/g
Edmonton - 99.4/l to 112.9/l
Langley - 123.9/l to 141.9/l
Kelowna - 126.9/l to, you guessed it 126.9/l

In all fairness though, you could drive up to Vernon to save yourself a penny per litre - and it doesn't matter what station you go to because guess what? They're all 125.9/l :up:
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