Price controls by any other name

Mom-and-pop service stations are running into a problem as gasoline marches toward $4 a gallon: Thousands of old-fashioned pumps can’t register more than $3.99 on their spinning mechanical dials.

The pumps, throwbacks to a bygone era on the American road, are difficult and expensive to upgrade, and replacing them is often out of the question for station owners who are still just scraping by.

Many of the same pumps can only count up to $99.99 for the total sale, preventing owners of some SUVs, vans, trucks and tractor-trailers to fill their tanks all the way.

As many as 8,500 of the nation’s 170,000 service stations have old-style meters that need to be fixed – about 17,000 individual pumps, said Bob Renkes, executive vice president of the Petroleum Equipment Institute of Tulsa, Okla.

Here is the full story, thanks to William Griffiths for the pointer.

Comments

Not exactly price controls. More like menu costs, as Mankiw says.

There's something going on with my debit card transactions at gas stations that's limiting me to either $70 or $75, something I never would have noticed until I got a car with a 20 gallon tank. I think the limit is on the gas station end because the number isn't the same every time. Curious that they would do that, but it keeps me from completely filling up sometimes, although I get close. It would be pretty annoying if I had a huge tank.

Wow, interesting tidbit:

To deal with the problem, some state regulators are allowing half-pricing — displaying the price for a half-gallon of gas, then doubling the price shown on the meter.

In North Dakota, regulators recently told service stations their mechanical pumps could use half-pricing, provided they use signs to alert costumers and find a permanent solution by April 2009.

Think about that: they may start advertising the price of a HALF gallon of gas. Now, bear with me for a
minute here. We all know how human psychology works. If some stations actually do switch to half-gallon pricing,
people will "feel" that the prices are lower there, EVEN if they see the label, and can do the math. Just
like with the dorky practice of selling stuff at "$39.99" instead of "$40", stupid things like this can make people
alter their behavior for stupid reasons.

So then what happens when some advertise half-gallon prices, and some full-gallon prices? Well, then they will ALL
want to switch to half-gallon pricing. Furthemore, imagine what happens afterward, even if prices go back dowan
and/or new pumps are installed? Do you think they'll switch back to full-gallong pricing? Not likely! After all,
who wants to be first?

So, perhaps a legacy of all this will be a switch to a different measure for gasoline.

Some years ago, some gas stations switched to liter pricing for this reason. It didn't last.

Person,

The end state of this is that we'll all end up with gas being measured in liters, like in Europe.

Isn't there supposed to be a central bank somewhere to deal with exactly this sort of problem by increasing the gallon supply? Gallons are sticky, damnit.

Barring that, this could be a good impetus to abolish both the penny and the nickel, and then take the next step of revaluing the currency by a factor of 10.

I bet this turns out to be a bigger problem than Y2K.

In Brazil, during the high inflation era of the late 80s and early 90s it was pretty common for pumps to run out of space (a liter of gas could easily start the year at 1.00 and end at 30.00).

The solution was to change were the decimals started. So prices on pumps as marked on pumps could go from 4.00 to "0(space was a dot used to be)4(painted dot)0(painted 0)".

That was not a big deal, but then, we were capable of coping with a lot.

So the pumps which were installed to replace the ones which couldn't go above 99 cents (because when those were made, who could envision $1/gallon gasoline) have a limit of $3.99? Will they replace those with pumps with a $5.99/gallon limit?

We'll know things are really bad when people start getting into gunfights at service stations over the last tankfuls of $20/gallon gasoline.

They'd be well advised to get signs that also have room for natural gas and alcohol.

I remember the 1/2 gallon pricing in the 1970s when gas spiked over a dollar a gallon. That might have been 1979. No big deal. My guess is that the price of gas divided by the per capita GDP is much lower now than then, though I am too lazy to go look that up now. Plus, except for the most foolish of v10 pick-up truck, Hummer and Suburban/Excursion buyers, cars today are more fuel efficient than then. So, our high gas prices of today are surely less of a burden, on average, now than then. But of course, they are more painful now than 2 yeas ago.

You folks don't travel much. When is the last time you filled with a pump like this? The biggest danger to pumping gas is if the satellites go down and they don't take credit cards.

@ Dr.Grizzard: i dont much trust insurance schemes to prevent voc's from leaking into the aquifer that provides my drinking water. much better to lock the stable with the horse still in it

in the daily life there are a lot of things you are not know

Everything is decided by the market instead of any single human being’s personal feeling.
But opportunity and efforts are same important on the way to yr goal.
Like the aion gold performance in the market.

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