Thursday, September 22, 2005

Saskatchewan government supports gas price controls

From the Star Phoenix:

REGINA -- The federal government should be thinking hard about regulating gasoline prices, which have reached record levels in recent months, says the provincial government.

But pressing for such a policy would require a consensus among the provinces, and that has been elusive, said Frank Quennell, who as the NDP's justice minister is responsible for consumer affairs.

This is the most absurd notion I have ever heard. Cap gas prices and suppliers will export gasoline to higher priced markets to the south, creating shortage. If you want to bring prices down, you have to encourage supply, cut taxes and reduce consumption. Simple economics, but this government has never been strong in that area.

Sure, cap gas prices, but don't say you weren't warned. Regardless, this is likely a diversion tactic. The government must appear to be doing something, rather than addressing their own tax grab.

Great editorial on the subject here...

4 comments:

Shawn said...

Increase supply? That would require two things from the govt's.
1) An acknowledgement that supply and demand are actually linked and influence the economy.
2) An increase in refining capacity which would probably cause rioting by environmentalists.

Shawn said...

Abundant evidence exists regarding the economic suicide price controls cause.

In fact, allowing prices to escalate in times of shortage typically leads to discovery of alternate methods or improvements in existing technology.

Leaving aside the massive government investment (and the requisite waste/playing favorites), alternative fuels are being researched at a growing rate due to concerns over fossil fuel availability/cost. They would continue to do so even if the government stopped funding completely.

len pryor said...

Shawn said it all.

BT said...

Sure - Numerous totalitarian regimes in the 20th century regulated the price of certain essential commodities like...BREAD! What did you get? Why, BREAD LINES!

Now wasn't that a big improvement? Of course, when citizens complained that the bakers refused to sell bread below their cost to produce, they simply KILLED THE BAKERS! (All Liberals in unison: Yay!)

How depressing that so many Canadians lack basic knowledge of history, basic economics, or any common sense.

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