It probably hasn’t escaped your attention that motorists are facing long queues at petrol stations, amid panic buying and reports of fuel shortages across the country. With this chaos at the pumps, should petrol stations be hiking prices to curb demand and preserve supply?
YES: Harry Fone, TPA grassroots campaign manager
Price gouging is not something I support lightly, but in times of supply shortages, it’s a very good antidote. It’s an incredibly effective way to stop consumers hoarding supplies of a particular product. Increasing prices at the pumps will make Brits think twice about whether they really need to fill up or not. As we’ve already seen, people have been selfishly filling up jerry cans and needlessly topping up their petrol tanks whilst depriving those who really need fuel, such as healthcare and key workers.
Temporarily hiking prices would reduce panic buying because, for the most part, only those that have a genuine need for fuel would purchase it. Yes it can be argued that a price hike is unfair because of other people’s greed - but what other viable solution is there? Increasing prices will hurt consumers in their pockets, particularly those on lower incomes, but it’s only a temporary measure to what should hopefully be a short-term supply issue. Better they can get some fuel at a higher price than none at all at a lower price.
NO: James Roberts, TPA political director
No one enjoys sitting in traffic waiting to fill up. Many resorted to it because they have no choice. Van drivers, cabbies, builders and paramedics - just about anyone who needs a vehicle for work - had no option but to sit in long queues behind hysterical hoarders.
Price gouging would punish these working people hardest. Their demand is inelastic, but they’re more hammered by higher prices. The affluent yummy mummies and leisurely retirees, who had no business panicking about running short, can happily pay to refill their gas guzzlers from their large disposable incomes. Not so much for the people living job-to-job, shift-to-shift.
Putting them out of work with petrol price hikes would be bad for them, the taxpayer and the economy as a whole. Far better to rapidly improve supply, such as by relaxing competition rules and restrictions on tanker driver working hours. Current pressures are temporary, but the unfairness resulting from price gouging would be long remembered.