Jack Layton Calling for Gas Control Prices

[Argus]

Stephen Harper vowed to reduce gas taxes if he were elected. According to the Canadian Taxpayers Federation, this is yet another broken promise.

Add Norman to the list of one trick ponies. Argus would blame immigrants for high gasoline prices. Leafless would blame Quebec and the French. Norman blames Stephen Harper.

I don't blame immigrants for anything, and I think the suggestion I do only lessens your already low credibility on that subject. I blame the immigration system for allowing too many immigrants into Canada, and too many of the wrong types to enter and stay here. I don't believe I'm alone in that. I think most Canadians disagree with your wide-open borders-except-for-Quebec-of-course immigration beliefs.

[Wilber]

Are you saying that Harper didn't keep his promise to reduce gasoline taxes in order to protect the environment?

No and I don't believe he has either, but I guess you are.

[normanchateau]

Are you saying that Harper didn't keep his promise to reduce gasoline taxes in order to protect the environment?

No and I don't believe he has either, but I guess you are.

Actually I have no idea why he didn't keep his promise to reduce gasoline taxes. To the best of my knowledge, he's never explained it.

[Wilber]

Actually I have no idea why he didn't keep his promise to reduce gasoline taxes. To the best of my knowledge, he's never explained it.

Guess he figured he had something better to spend the money on. Funny how that happens in government.

[sharkman]

Yeah, get back to me when Chretien explains all of his decisions, or Martin his.

[Michael Bluth]

Yeah, get back to me when Chretien explains all of his decisions, or Martin his.

Martin made decisions?

I thought he just dithered until his hand was forced.

[Topaz]

Let's face it. NO government will EVER find anything wrong with the gas companies and the price of gas. We know they are making big profits, so common-sense says the governments are not telling the truth. The prices are ruled by supply and demand, so its the public that can have some say what the prices are. IF everyone drove a 4cycle car, and the prices still stayed up, then, there would be the proof that they are ripping off the public. So... I guess the answer is to cut back on filling up as you can. Remember, with hoildays coming up, be prepared for rising prices.

[Charles Anthony]

Let's face it. NO government will EVER find anything wrong with the gas companies and the price of gas. We know they are making big profits, so common-sense says the governments are not telling the truth.

Truth about what?? What are you suggesting?

[rrabbit]

I'm fairly certain gasoline retail is optimized for profit using a method called "linear programming". I won't get into the details of the methodology here other than to briefly describe how it works in this application.

People will continue to buy gasoline at a set volume per week so long as the price stays within a certain range. Lower the price below this range and gasoline purchases will rise, however the profit margin is decreased. Raise the price above the range and purchases drop, but, profit margins are higher. Linear programming is used to determine the price that optimizes profit. That is, find the price that offers the best compromise between profit margin and purchase volume to maximize profits.

Many factors other than price and purchase are used in linear programming. The fact that such methodology is being used is betrayed by the way gasoline prices rise at holidays and drop when the holiday is over under the influence of these factors. People want to travel or drive more on holidays than they do at other times. Propensity to consume is a factor often used in marketing models employing linear programming.

Most other industries employ linear programming or other similiar optimization methods in marketing and profit and optimization. Thos familiar with the methods would not be surprised at all if gasoline marketing used them. The main difference between gasoline retailing and other retailers is a greed obsessed daily adjustment of pricing instead of a more conentional weekly, monthly or annual adjustment of price.

The application of optimization methods are supposedly good for an economy. I can buy this most of the time. However when it comes to vital services, utilities and telecommunications are a good examples, its often better for the economy and society as a whole if government interferes to contol prices and stabilize the market. We find another examples of required government or centralized control of a free market in the setting of interest rates for borrowing and lending. To a certain extent free for all marketing is good for an economy. However if the free for all gets out of control in a certain market it can have disastrous consequences for an economy and a society.

The rise of a monopoly condition is often bad for a competitive free market economy. Again government has to step in and interfere with the "freedoms" of a free market. This is why deregulation has occurred recently in some markets like telecommunications. Despite all appearances to the contrary deregulation was government control (well 'interference in' if you prefer) of a market.

Government limiting the profits in retailing of gasoline would likely also be a beneficial excercise in market influence since it has also become a "vital service". The gas companies wouldn't skip a beat. They'd just include the price controls in their optimization model and continue on marketing gasoline. The general public would see reduced prices at the pump and reduced inflation in the economy overall.

You can likely Google "linear progamming" optimization to get more detailed background on such methods.

[Charles Anthony]

I'm fairly certain gasoline retail is optimized for profit using a method called "linear programming". I won't get into the details of the methodology here other than to briefly describe how it works in this application.

What does it matter? The gasoline companies can use any methodology they want.

The rise of a monopoly condition is often bad for a competitive free market economy. Again government has to step in and interfere with the "freedoms" of a free market.

Step in and do what???

Government limiting the profits in retailing of gasoline would likely also

-- lead to companies moving out of the gasoline supply industry and consumers would get shortages.

They'd just include the price controls in their optimization model and continue on marketing gasoline. The general public would see reduced prices at the pump and reduced inflation in the economy overall.

The general public would only see supply shortages.

I can not believe I am hearing an advocacy for the Soviet experience.

Anybody for a game of football? I have a loaf of bread.

[sharkman]

I'm fairly certain gasoline retail is optimized for profit using a method called "linear programming". I won't get into the details of the methodology here other than to briefly describe how it works in this application.

Can linear programming be responsible for gas prices changing 3 times in one day?

[Wilber]

You have to remember that the Federal government also profits from higher gas prices because GST is charged on the total. The price goes up 16% and government collects 1% more in tax. Governments have a conflict of interest whenever they charge a tax that is a percentage of a price, whether it is GST or any other sales tax. Their taxes are indexed to the cost of living. Wish my income was.