Price Gouging in Times of High Demand

Ozarkgal

Ozarkgal

Senior Member
Location
Deep in the Ozark woods
It seems like whenever something is in higher demand for a short period of time the price goes through the roof. Why is it, that this stuff sits around at a consistent price for eons, but the minute a temporary situation occurs, like temporary cold weather, the price is jacked up as far as they think the public will stand it before they do without it.

My example is yesterday on coming down our road we saw the propane truck at the neighbors. Our tank is a little over half full, but we're expecting some more bad weather coming in next week so we stopped to see if he might want to come a bit further down and top off our tank.

He asked us if we wanted him to fill it before he told us the price...I knew it wasn't good, so I asked him what it was going for...gulp! $3.29 a pound.....hooollyyyy sheeeittt. Last spring we paid $1.89 and I thought that was high. He said if we really didn't need it to wait a few weeks, the price would come down.

We have central air and heat, but like to keep the propane level up in case of a power outage. We have a back up built in propane heater that will heat the whole house nicely in an emergency.

What makes something so much more valuable in times of temporary higher demand, why don't they just sell it at a normal price and when they run out it's gone? There's only so much of a commodity anyway, and it's just as gone at $1.89 as it is at $3.39.

In my book this is price gouging. As far as I know there is no shortage of propane in this area. No one is having trouble getting it.
 

OG, apparently, we are having a propane shortage here in Alabama, due to the polar vortex and the cold in the south recently. From what I was reading, some of the chicken farms (and probably many other rural-type businesses) use propane, and since they are trying to keep the chickens warm, alive, and laying eggs; they are using incredible amounts of propane to keep the chicken barns heated.
Also, many people who live in the country use propane for heat, as well as restaurants, and other businesses that are located along the highway, and have no access to natural gas.

I totally agree that price gouging is wrong, and it seems to happen whenever we have some kind of a disaster, and there is a shortage of something. When the hurricanes hit Louisiana, and people were trying to evacuate, gas prices skyrocketed, too.

Here is an article by the Alabama Governor that talks about the propane shortage, and I imagine that it affects more than just Alabama.

http://www.al.com/business/index.ssf/2014/01/gov_robert_bentley_declares_st.html
 
It IS price gouging Ozarkgal, they'll rake you over the coals whenever they can. It's really a shame, but people don't care about others, only dollar signs. They take advantage of any storms or emergency situations! :mad: :dollar:
 

I think this is unconscionable, since in the rural areas particularly, many people depend on propane for heating and cooking. Our gas range is propane, as are many others around here. The difference between $1.89 and $3.29 will mean that some people will go without heat in the coldest winter in years, if they don't have the extra cash to lay out for this unforeseen situation.

The same thing happened with the gas prices. People had to go without a lot necessities, just to be able to get back and forth to work at the peak of this price gouge. This is an ongoing price gouge in my opinion. There isn't and never was a gas shortage, and yet gas prices are still very high.
 
  • Like
Reactions: Ina
2 ways of looking at it. Depends if your buying or selling how outraged you get. Free enterprise relies on market forces to operate. Legislating price levels smacks of 'socialist' control doesn't it? Can't have it both ways. Imagine never getting a bargain on something?

Gouging is a fact of life here, especially on gas pricing, it varies from day to day and depends on how much competition the servo has as to what we pay for something we have to buy. We all beech and whinge and successive governments demand enquiries and promise crackdowns on the practice but decades on nothing changes. Basically because most of the price we pay at the pump goes to the very government who promises lower prices. They are the greatest gougers of all and their percentage of take per litre rises with the petrol price so they're not going to stop that easy earner are they? The oil companies everybody blames only make around 20c or so and the servo operator makes about 2-4c per litre, the government gets the rest. DB would know more about the subject but do we begrudge the servo owner making an extra cent or two from the seasonal tourist traffic to keep him afloat the rest of the year?

Or do we really resent someone who maintains a holiday home or unit year round, paying rates on the investment that stands empty most of the year making a better rental return in peak holiday times to make the effort of providing accommodation at all when we need it worth the effort?

Sure there are blatant examples of gouging that border on criminal, like withholding food handouts in famine areas and selling it as blackmarket or something but really, day to day trading is a cut throat business. Don't buy what you don't have to. If you have to then it's your bad luck and the sellers good luck. He mightn't have a single customer next week so what goes round comes round.

I was selling heaps of junk jewellery at a 600% to 1000% mark up. Was I gouging them? Nup, I was making a profit on something in particular that they wanted that they couldn't get made that cheap anywhere else. Right place, right time. Luck of the draw. I couldn't give that type away here, different clientele entirely. Ce la vie.
 
I am speaking more to gouging people in times of short term strife. It's different than someone who owns a vacation rental and offers a discount on off peak seasons, when vacationers are few and raises it during peak seasons to afford the upkeep, mortgage and taxes, and just maybe make a profit, or selling jewelry at huge markup. These are luxury items and a consumer can take it or leave it.

As far as gasoline prices go, yes the government gets the lion's share of the profits in taxes, but the big 5 oil companies are getting billions of dollars in government subsidies, while raking in record profits. A pat my back, and I'll pat yours symbiotic relationship if I've ever seen one.

In 2012 all but one of the big 5 that raked in record profits, pumped fewer barrels of oil than in 2011, but had record profits. This translates into pumping less oil, thus the need for smaller operating costs, but at the same time jack the prices up, and not just enough to cover the loss of pumping less oil, but enough to make record profits. This is gouging and taking advantage of the public that depends on it.

Now the oil companies are stagnant and projecting losses..I predict there will be a shortage soon and more price increases coming?

Free enterprise is a wonderful system, and I don't advocate socialism in any way. But it is not free enterprise when there is such a symbiotic relationship between two parties, such as the government and Big Oil.
 
Gee, maybe we should run around and make a bunch of new nuclear power plants to take up the slack. That way, when climate change gives us another prehistorically cold winter we can just turn up the dials in the control room until the rods start glowing and we'll all be toasty warm.

Supply and demand - if you choose to participate in modern society then you have to accept that concept. If you were one of those who had installed alternative energy measures then you wouldn't have to deal with the price gouging.
 
When we had all those storms back in 2006, the price of generators doubled, even tripled and everyone was up in arms about it. I don't believe anything was ever done about it though. Price gouging at its finest hour.
 
Come on folks,its the American way its what we do and do nothing about it.
If the POTUS was running for re-election,he would say something about this price gouging like he did about gas pricing at the pump.
Remember that one?
 
Yes, I do remember that horrible year. Large herds of purebred horses standing in pastures starving to death, even kill buyers didn't want them they were so skinny. People were desperate to give them away, but no one wanted them..

This year there are hay for sale signs in farmers front yards, guess the crop was good and now they can't give it away either. Of course the horse population has dramatically decreased, and I just read that cattle herds are the lowest since 1951. They are predicting record beef prices soon. Their blaming it on drought across the Great Plains, yet we have an abundance here.

Why is everything that's in demand have record breaking prices?
 
Unfortunately, sometimes we simply have no choice but to pay the high prices, and I agree that it is totally a wrong thing to do to people who are already struggling to get through whatever is causing the shortage (tornado, winter storms, etc), and when the amount of gas runs short in an area, prices go out of the reasonable range, just because the business owners know that they can charge that, and get away with it.

Even though we might be having a shortage of propane locally (here in the South), there is not a nationwide shortage, we just used more than the suppliers had delivered to this area, and then with the roads shut down from the ice storm, no more could be brought in.
The same identical thing happened when hurricane Katrina hit Louisiana and Mississippi. People were trying to evacuate, and there was a gas shortage in that area, and no way to get more trucks in with gas for a while.

Like Phil said, we need to be as prepared as possible to survive through disasters like this, and have a backup supply of food, water, and some kind of a heat source. Even a small supply can be a lifesaver when a storm or earthquake hits.
 
Ozarkgal said:
... So we should just accept immorality?
Click to expand...

Actually I think that opens up a whole 'nuther discussion.

Since morality - the perception of good and evil, good and bad - is based mainly upon religious writings you would have to bring religion into the question of why prices rise with supply and demand.

And THAT would be a discussion that would never end, since everyone sees morality in a different light.
 
Ozarkgal said:
It seems like whenever something is in higher demand for a short period of time the price goes through the roof. Why is it, that this stuff sits around at a consistent price for eons, but the minute a temporary situation occurs, like temporary cold weather, the price is jacked up as far as they think the public will stand it before they do without it.

My example is yesterday on coming down our road we saw the propane truck at the neighbors. Our tank is a little over half full, but we're expecting some more bad weather coming in next week so we stopped to see if he might want to come a bit further down and top off our tank.

He asked us if we wanted him to fill it before he told us the price...I knew it wasn't good, so I asked him what it was going for...gulp! $3.29 a pound.....hooollyyyy sheeeittt. Last spring we paid $1.89 and I thought that was high. He said if we really didn't need it to wait a few weeks, the price would come down.

We have central air and heat, but like to keep the propane level up in case of a power outage. We have a back up built in propane heater that will heat the whole house nicely in an emergency.

What makes something so much more valuable in times of temporary higher demand, why don't they just sell it at a normal price and when they run out it's gone? There's only so much of a commodity anyway, and it's just as gone at $1.89 as it is at $3.39.

In my book this is price gouging. As far as I know there is no shortage of propane in this area. No one is having trouble getting it.
Click to expand...

Glad you weren't in urgent need, OG, that's ridiculous.

I also just saw on the news that low to med rated hotel/motels in the area of the Super Bowl, normally $79 - $99/night are as much as $5,000/night, none of them less than $1,000. And wait 'til those who've paid it see what they're getting for that outrageous sum. This wasn't just some of them, but the majority of them. Dead bugs in the room, barely cleaned, dirty comforters, long strands of hair on the fresh (?!) linens and long hair in the sinks. And the smallest rooms you could possibly fit 2 people into...along with so many other negatives, it should be against the law. Turned my stomach to look at it. The Holiday Inn Express was the only one out of dozens that was clean and highly rated by CNN who did the investigation.

I hate businesses that take advantage!
 
Phil:
If you were one of those who had installed alternative energy measures then you wouldn't have to deal with the price gouging.
Click to expand...

As I stated propane is my back up, it is an alternative energy measure. If you are speaking of solar type energy, I do not have thousands of dollars to invest in converting to solar energy that is iffy at best, nor will I likely live long enough to realize the break even point of installation. I'm too busy paying for price gouging to be able to save money to pay for it anyway. Here are some prices based on 2012 pricing.

Note that the pricing does not include a 30% rebate from the federal government, but it also doesn't include many other associated costs of installation which will most likely eclipse any rebate.

System Size
(in watts per hour)​
Monthly Output Capability (based on 5 hours of direct / insolated sunshine per day)​
Approximate Cost, BEFORE subtracting up to 30% of cost Federal Tax Credit or state rebates or local financial incentives.​
275 - 480 kWh​
$3,000-$7,376​
482-785 kWh​
$7,400-$11,000​
981-1,600 kWh​
$11,361-$21,643​
1,960-2,620 kWh​
$22,607-$34,800​
These figures are based on complete solar power systems that Wholesale Solar sells. Prices are approximate as of August 2012. Prices do not include racking, freight, tax, installation, or auxiliary battery back-up systems.

Phil:
Actually I think that opens up a whole 'nuther discussion.

Since morality - the perception of good and evil, good and bad - is based mainly upon religious writings you would have to bring religion into the question of why prices rise with supply and demand.
Click to expand...

That is a good idea for a whole 'nuther discussion.
 

You must log in or register to reply here.

Back
Top