35 comments on Hot Gas is a Bunch of Hot Air
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35 comments on Hot Gas is a Bunch of Hot Air
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GAIA Host Collective
Strangely, the result in Canada seems to be that the government forced the retailers to make an additional billion dollars over 10 years
Key point: "seems to be." Prices aren't set in a vacuum. If I only sell you 3/4 a gallon and call it a gallon, I am not going to profit 1/4 a gallon. Price is still going to respond to supply and demand. It doesn't matter. I can call a liter a gallon. The amount you pay at the pump isn't going to make any difference. That's what these analyses can't seem to get.
Also, as pointed out, even if you accept the premise, we are talking about a penny a gallon across the country. And the profit margins for retailers - which are pretty darn slim - already have that factored in.
I think we just see things somewhat differently - in the case of 'cold' gas, the amount sold as a gallon was more than a gallon during colder periods, which meant that after the equipment was installed, a retailer was able to sell 'more' than they had previously, if not in physical quantity, then in terms of money received.
You are welcome to believe that the market then lowered it prices to adjust to this fact, and everything remained unchanged otherwise, apart from recovering the cost of the installed equipment. I'm cynical. There is a reason for weights and measures department, for example, one empirically demonstrated over generations. Though possibly, at some point, we may hear about that unnecessary regulatory burden, since the cost of ensuring that merchants actually deliver the amount they claim to sell is an overhead which can be removed for the benefit of the customers.
And yet, it is never the customers clamoring for higher prices for the merchant's profit, it is the merchant. The customer is always clamoring for lower prices at the merchant's cost. In Canada, it seems as if the merchant benefited by installing such equipment - in the U.S., the customer would seem to benefit (trivially at best). Strangely, in Canada such equipment seems to have been installed, somewhat voluntarily, by retailers. In America, it is being resisted by the retailers.
None of this is a surprise, and I notice neither of us needs to discuss the facts, as they apply equally with 'cold' gas as 'hot.' Except for cold gas, the equipment seems to have been installed at the behest of the oil retailing industry, after appropriate regulatory changes to use 15° C as the Canadian average (which appears inaccurate in terms of Canadian temperatures), as there does not seem to have been a groundswell of populist sentiment from Canadian gasoline customers to pay more for gasoline.
No surprise - everyone has interests they feel worth protecting, and in which facts are used to support their interests. Such tensions are part of the marketplace, after all.