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Gasoline prices: two alternative viewpoints
7.25.09
The letters to the editor pages of local newspapers frequently contain complaints from readers about the disparity in gasoline prices from town to town, and even within towns, from station to station.
Why, correspondents ask, should there be such great disparity in the price of gas? Why do stations touting the same national brand, owned by the same local distributor, sport different pricing?
Or why should there be such a great difference in price between the gas, say, sold by a Shell station or an Exxon-Mobil station?
Or why should there be such a great difference in price between the gas sold in Pittsfield, Mass., and Great Barrington, Mass.?
[Note that I'm not suggesting that these arguments have any merit on their face -- I don't accept that there are significant price differences. I'm more interested in the thinking behind the perception of the differences.]
Think, for a moment, of a different scenario: What if every gas station, regardless of brand of gas, station owner, and town, sold gasoline for the exact same price.
Wouldn't that be much greater cause for concern? Wouldn't that scenario be much more ominous, with the presumption that there was some sort of illegal, conspiratorial price-fixing taking place? Would that scenario be cause for much greater suspicion, paranoia, or outrage?
No one says 'boo' over the fact that the price of Advil or milk differs wildly from store to store, chain to chain, town to town. We expect this - nay, we encourage this - as part of the behavior of the free market.
We love the fact that we can find a great deal on Advil (I found an awesome deal on generic Advil at the local Rite-Aid yesterday, I got 200 pills for under $8: beat that!). We don't complain about it.
Short of nationalizing the gasoline distribution and retail industry, and setting up some sort of statewide or federal fixed pricing -- something hardly anyone wants, and not to my knowledge part of any national conversation or debate -- gas prices are going to fluctuate and be different from station to station, town to town.
And we should be thankful about that, as a sign that the free-enterprise system, such as it is and for what it's worth, is still creaking along.
We are not, after all, Venezuela.
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