Would Be Interesting to Know

Rationing, shortages and profiteering hit garages yesterday ahead of the planned strike at the Grangemouth oil refinery as motoring organisations and government ministers pleaded with drivers not to panic-buy petrol.

Many stations in Scotland limited customers to £10 or £20-worth of fuel, a few ran out of diesel, and a small number raised prices by up to 10p a litre.

So, did those stations which raised prices run out of fuel or have to impose rationing? For one can use either price of quantity offered to choke off demand: we usually find that the former works better.

8 thoughts on “Would Be Interesting to Know”

  1. I bet petrol demand is pretty inelastic in the short term. Choking of demand by sudden price rises will be painful.

  2. And price rises will encourage supply. An enterprising tanker owner may head to Scotland to deliver his petrol rather than Cornwall.

  3. “And price rises will encourage supply. An enterprising tanker owner may head to Scotland to deliver his petrol rather than Cornwall.”

    It’s “his” petrol is it? Hmmn. Anyway, all in theory correct, but it requires time to react. By the time that’s done, the whole problem will be gone. Who will bother to invest in shipping to Scotland for a blip?

  4. I was assuming it would be “his” petrol – I was not recommending petrol rustling;)
    I would guess a single trip could pay for our tanker owners summer holiday.

  5. I’m not sure it will be over that quickly – this plant has not been shut down for over 70 years, and will take between a week and a MONTH to bring fully back online.

    Plus a govt minister said there would be plenty of petrol, so that really is time to start panicking…

  6. I don’t think you can baldly assert that rationing by price increases is better than rationing by amount – it depends. Small businesses rely on customer goodwill, and huge price increases probably won’t go down well.

  7. Matthew:

    The increases may not “go down well,” indeed but since “goodwill” consists primarily in perceived differences between retailers and such difference as likely to persist in spite of price rises, I cannot see that your prediction is other than nonsequiturial.

    Unless, of course, you imply that some are so infuriated that they simply eschew fuel purchases completely to punish the effrontery of their previously “favorite” retailer. Good luck to them.

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