<p>The world schools debating championship national qualifying rounds are coming up in Bangladesh. Requesting debaters in the CC community to help with this motion ( both for and against) :</p>
<p>This house believes that petrol (gasoline) prices should be regulated by the free market only.</p>
<p>Thanks!</p>
<p>Well they are right. Govt regulation only increases prices and any other regulation gives the market artificial prices. Artificial prices can be lower than the market regulated prices, and eventually the company would go bankrupt, see Economic calculation problem.</p>
<p>You assume gas companies don't collude or that oil prices don't affect gas prices, since oil prices are controlled by a cartel and not the government or free markets. I believe the OP is under the impression that gas prices are controlled by the cartels, and wishes to argue that debate. However, some people don't feel gas prices are regulated by oil prices. The greater demand for oil is in consumer goods, like plastic, that have no substitute while gas is supplimented with ethanol dependent on oil prices.</p>
<p>Gas prices can only be in control of cartels in a instance of crony capitalism. In a true capitalistic society/world such could not and would not ever occur. Only the very instance of cronyism allows for such.</p>
<p>Trying to control gas prices, without being able to control oil prices, is like trying to control the price of cheese without being able to control the price of milk.</p>
<p>Let's say it takes 2 gallons of milk to make 1 pound of cheese (I have no idea what the right number is). If a gallon of milk costs $2.50, and the government sets the price of cheese at $7.00/pound, there is $2.00/pound of potential profit (after costs of production). Since everyone loves cheese, the Government decides to set the price of cheese at $7.00/pound. Everyone is estatic. A year later, the price of milk has risen to $3.50/gallon, but the regulated price of cheese has not changed. Guess what happens? No one makes any more cheese. If the raw product costs $7.00 (2 gallons at 3.50/gal), and the finished product can only fetch $7.00, then they can't make a profit (it costs something for the labor, energy, and other stuff that goes into the cheese).</p>
<p>So, the only thing government regulation of gas prices will produce is gas lines and shortages when the price of oil makes it non-profitable to make gasonline. The independent refiners can't afford to buy oil at $100/barrel, and sell gasoline at $2.00/gallon. So they will stop making gas when the price of oil goes to high (they have to buy the oil in order to refine it).</p>
<p>Now a captive refiner (one owned by an oil company) can decide if they want to sell the oil for $100/barrel to Japan, or refine it and sell the gasonline at a controlled price. Guess what? They will do what is more profitable, and sell the oil to Japan.</p>
<p>China regulates the price of gasoline. When oil was $100+ per barrel, China had to give subsidies to their oil refineries in order get them to produce the gasonline and sell it at the controlled price.</p>
<p>its roughly 10 lbs of milk to make a 1lb of cheese</p>