Government gas cartel enforced… After taxes!

June 3, 2005 at 3:34 am | In Libertarian Rants |

Uncle Sam's Cartel

As if government taxes weren't enough, Maryland has decided (circa 2001) that they can tell a gas station what price they can and can't sell their gas for.

Apparently Maryland has legislated that a gas station can not sell gas for lower than what they pay for it. While maybe that's general good business sense, what right does the government have to mandate a price in the first place? The way I see it, they already taxed it. They already got their say (regardless if the tax was right in the first place). As long as the gas station could afford to do it, it sounds like a solid competitive business strategy. I honestly don't care if it pisses off the other gas stations in town, I'll buy from whoever has the cheapest gas prices this week.

Maryland is not only allowing price fixing, this time they are actively involved in a cartel by any reasonable definition of the word. Non-government affiliated organizations would be held accountable to anti-trust laws, but when the government does it themselves… who's to keep them accountable?


2 Comments »

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  1. The largest factor in this being an issue is that one of the parties involved is the federal government, utilizing its power to create laws. If this were a private producer of oil, I think this would be a perfectly valid scenario. If Chevron buys its gas from the provider, why can't that party create a contract where one of the terms of the purchase is that the product can't be sold for less than a certain price? This seems like a valid concern for somebody when selling goods, that they don't want their consumer to become a competitor. If the price cut is valuable enough, most consumers would probably be willing to agree to this term.

    Comment by Gandhi — June 20, 2005 #

  2. Certainly private contracts should be allowed, including whatever terms and conditions the two parties voluntarily decide upon. The only problem is that the government is in fact a third party to this whole situation. The gas station is not purchasing gas from the central government, it's buying it from offshore gas producers. The Gas station and the producer should be the only ones who can have a say in the terms of the agreement.

    Then again, if this were the case (a private contract between gas station and producer).. They wouldn't really be buying gas now would they? It would be licencing gas. For raw materials, where there is little innovation and product distinction, I highly doubt that such an agreement would naturally occur without government involvment.

    Comment by ryan — June 22, 2005 #

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