The Instigator
FeioH-Niplef
Pro (for)
Losing
0 Points
The Contender
ClassicRobert
Con (against)
Winning
12 Points

Changing gas prices accordingly to citizen travel frequency

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Post Voting Period
The voting period for this debate has ended.
after 3 votes the winner is...
ClassicRobert
Voting Style: Open Point System: 7 Point
Started: 5/19/2013 Category: Economics
Updated: 4 years ago Status: Post Voting Period
Viewed: 1,682 times Debate No: 33897
Debate Rounds (3)
Comments (0)
Votes (3)

 

FeioH-Niplef

Pro

It is clearly obvious that there is a commonplace issue with gas prices. Undoubtedly, drivers are always unsettled to the price per-gallon of gas they have to pay when stopping to refuel. For this reason there is controversy over gas price regulation. However, gas prices should be regulated accordingly to citizen seasonal travels.

Let us say that we have gas prices decreased during the most obvious vaccination seasons, like summer. During the summer, average Americans go on tours and vacate long distances. For this reason, it should reasonable as to why a gas price should be changed accordingly. I am not certain whether or not the price should increase or decrease on the matter, but I am stating that the prices must be changed according to citizen travels. Determining whether a person travels/vacates is easy. There is something called the census. Using the census he government can ask questions like, "do you travel", "how often do you travel", "do you make seasonal travels", "how far are your vacations", and so forth.

It seems silly to keep the gas prices at a set price when the majority of the country is not attending their usual driving habits. For example, under harsh seasonal storms/weather, it is unlikely that people will regularly perform their driving habits. Therefore, having a set gas price during a season like winter-- where weather is very harsh in some northern states-- seems silly.

There are indeed other variables that effect gas prices, and I acknowledge that I did not mention those in this argument, however, the extensiveness of my reasoning is rather limited on this economic matter. Therefore, I do not condone other ideas under this case, but I am rather more accepting. After all, I have not mentioned an opposition on my side yet.

Nevertheless, my final statement is that the government should regulate gas prices accordingly to citizen seasonal travels.
ClassicRobert

Con

I thank my opponent for opening such an interesting topic. I would first like to say that burden of proof is on Pro to show that "the government should regulate gas prices accordingly to citizen seasonal travels" (this is the resolution Pro is arguing in his introduction, so this is the resolution that will be argued). That is to say, all I need to do to win this debate is show that gas prices should not be regulated by the government according to citizen seasonal travels. I would like the readers to make note that the key phrase in the resolution is "the government should regulate." The debate, as it is being argued, is whether or not the the government should regulate gas prices according to citizen seasonal travels.

Refutations:

"It seems silly to keep the gas prices at a set price when the majority of the country is not attending their usual driving habits."

Gas prices are not kept at a set price. In fact, they can change drastically from one day to the next. That is because they are set by supply and demand (1), which is constantly changing according to consumption, and will be explained further in the case for con. I will explain in the case for con that gas prices change according to the "usual driving habits" of the majority of the country.

Case for Con

It is not necessary to regulate to achieve that goal

Economics is the study of how to allocate scarce resources to satisfy unlimited wants. As a resource, there is only a limited amount of oil that can be produced per day. Since there is only a limited amount, as more is demanded, the producers are able to raise prices and still sell all of their product, so they do. As less is demanded, producers must lower their prices in order to sell all of their product (2). So essentially, as more gas is needed for summer travels, more gas is demanded, which means that price goes up, and as less people travel in the winter relative to the summer, less gas is demanded, forcing the price down. This all means that price for gas is already changing according to citizen seasonal travels as proven by the basic laws of supply and demand. This is all possible without including census questions, as supply and demand set price simply by how much is purchased and how much is available. Since price is already changing according to seasonal travels, regulation is not necessary to make the price of gas responsive to citizen seasonal travels, so the government should not put in place regulations to change the price of gas according to citizen seasonal travels as the changes are already happening.

I look forward to my opponent's response.


1. http://www.investopedia.com...
2. http://www.investopedia.com...

Debate Round No. 1
FeioH-Niplef

Pro

  1. I have said before that "I am not certain whether or not the price should increase or decrease on the matter", however given Con's response and citations, I believe I have met a certainty.
  2. Having seasonal gas changes occurring already, it may seem that my side of his debate/discussion may come to a closure. However, since " less people travel in the winter ... the [gas prices goes] down", this will only result with the government or gas companies earning less profit. Considering the law of demand (as price increases the demand decreases, the inverse relationship of the demand curve) it is most reasonable for gas prices to not decrease in the winter but to actually stay relatively high. Since individuals do not make mends of their usual driving habits during the winter it is less likely for gas stations to have any customers;the demand of gas decreases during the winter, hence less profit is made. Eventually gas stations have to compensate for the loss of profit.
  3. Also, the amount of gas purchase varies widely. Since an individuals purchasing power is effected by the income effect (the more money one has the more likely they're to purchase) people aren't going to purchase a full-tank every visit they make to a gas station, rather they only spend what they can. Every person has a portion of their income disregarded for gasoline. It is widely known as "gas-money". Nevertheless, having purchasing power vary from person to person, the amount of gas money saved for gas will do likewise, hence the amount of gas purchased is varied widely.
  4. Since for a majority of the United States uses this "gas-money" managing system, only a set price of their income is used to pay for their usual gas purchases. This automatically rules out the elasticity of gas's demand since people are willing to pay what is most reasonable for their wallet, not for their tank (which is a full tank). For example, I go to the gas station during the summer and have 20$ of gas money saved for about 3.40$per-gallon giving me about 5.8 gallons of gas. The gas station has made 20$ dollars and has given 5.8 gallons of gas of which they have to make compensations for to restore those 6 gallons. Those compensations cost money as well. With that being said, if I were to revisit the gas station during the winter and the prices decreased to 3$per-gallon (respectively to the law of demand), and I use the same amount of money to purchase I will end up with 6.66 gallons of gas. In other words, the gas station will eventually have to make more costly compensations to restore more amounts of what is supplied. Now if the prices increased during winter, the gas station will have more profit, not necessarily negating the need to compensate, but will make it ever so slightly less costly for them.
  5. And who knows what compensation must be made. Higher prices during the summer when traveling is relatively frequent? A increase on your bag of chips or french vanilla gas stations sell? Oh sweet mother of god!

http://www.investopedia.com...

ClassicRobert

Con

In this argument, I will further show why my opponent's points are incorrect, and why government regulation of gas prices would not be necessary.

I will now refute his points.

"This will only result with the government or gas companies learning less profit."

Less profit than what? This was never specified. However, that being said, it is part of the natural cycle for gasoline for the price and output to decrease during the winter, as demand is decreased.

"Considering the law of demand (as price increases the demand decreases...) it is most reasonable for gas prices to not decrease in the winter but to actually stay relatively high.

This statement is simply a result of a misunderstanding of the law of demand. The law of demand states that when the price of a good rises, the amount demanded falls, and when the price falls, the amount demanded rises (1). There is a fundamental difference between demand and amount demanded. Amount demanded refers to how of a good consumers are willing to buy at any given price level. Demand, however, refers to total willingness to buy. The law of demand uses price and amount demanded as the only two variables. However, when the seasons change, the demand shifts, as willingness to spend on gasoline increases as desire to travel increases. When it is winter, the demand decreases, which lowers the price and the amount demanded at that price. So essentially, the price would decrease during the winter. It is not, in fact, more reasonable to assume that price for gasoline would stay high during the winter.

"Eventually gas stations have to compensate for the loss of profit"

Gas stations don't exactly make much from their gasoline sales. They only take in between seven and ten cents per gallon sold, and those seven to ten cents aren't all profit. They mostly go towards expenses, leaving the gas stations with only a few cents of profit per gallon sold (2). So essentially, the gas stations already get the bulk of their profits from the convenience stores. The gasoline is not so much a money maker for the gas station as something that brings people to their convenience stores. So essentially, compensation is not an issue.

"Now if the prices increased during winter, the gas station will have more profit, not necessarily negating the need to compensate, but will make it ever so slightly less costly for them"

I am assuming that my opponent is referring to artificially changing the gas prices to increase during the winter, as naturally the prices would decrease during the winter. However, through government regulation, the only ways that government could make the gas prices high would be by shifting the supply curve. The government would have to regulate to decrease the supply of gasoline, which would raise prices. However, as these regulations would do nothing about the demand of the consumers, the quantity demanded for gasoline would be decreased. Essentially, a raise in prices does not necessarily mean a raise in profit for the gas stations.

Now onto my own statements.

Now, the rest of his rebuttal does not address or further his resolution that government should regulate gas prices accordingly to citizen seasonal travels. He has simply stated that gas prices should be increased during the winter, and he then stated a bunch of unwarranted facts about the economics behind gasoline. In fact, he has not once in his Round 2 argument even mentioned the words “regulate” or “regulation,” which shows that he has not furthered his arguments according to the resolution in any way.

As he is arguing for a change, that government should regulate gas prices accordingly to citizen seasonal travels, he has burden of proof, and yet, he has not shown why government regulation would actually be necessary. In order to win this debate, he needs to do this. I have shown that government regulation is not necessary to change gas prices according to seasonal travels, as gas prices already change according to the demand of the consumers, and what the consumers are willing to pay.

I thank my opponent, and look forward to his response.

Sources:
1.http://www.econlib.org...
2.http://money.cnn.com...

Debate Round No. 2
FeioH-Niplef

Pro

As I stated earlier, the fact that gas has an inelastic demand-- due to the fact that people have gas money saved for
gas-- rejects my opponents statement (it rejects it NOT proving it wrong) when he claimed "its not reasonable to assume the price for gasoline to stay high during the winter".

Con, is basing this off of the law of demand which is understandable. But, since this topic is about gas regulation, I say a regulation should be made as to where gas stations would make the most out of what they supply. Even if gas, is just a portion of what a station makes, it is still money.

----

But let me make things clear and simple on my point, regarding Con's response.

Since I said in the beginning of this argument that I was not sure whether or not gas should increase/decrease during seasonal changes, I only announced that the gas should be "regulated". I did not make a specific statement as to an increase/decrease should be made only until my second argument.

I am not assuming that price will increase in the winter. I as a matter of fact I understand that this is in violation of the law of demand. But since I am not assuming, I am stating that gas should be regulated in the winter as to where stations would make more profit. In other words, gas should stay relatively high in the winter.

Con is simply misunderstanding my point of view.

----

Respectively to the law of demand, a gas station have to regulate their prices according to how likely it is for drivers to travel. If the price decreases it is likely that people will visit a station with relatively low prices and turn away from the high prices. But since both Con and I presume that it is less likely for drivers to visit gas stations in the winter than in the summer, its safe to presume that other products provided from the gas station wont be purchased as well. Hence, gas stations are not making profit from their gas/products in the winter, as much as they would be in the summer, thus they must compensate for a loss of money during that season when it is likely where people will drive more often: the summer season. So Con is wrong when he states "compensation is not an issue".
So virtually, a gas station will lose money in the winter relative to the summer. So to compensate, prices of gas (and products) is likely to increase during the summer-- respecting the law of demand and for the need to compensate.

If we want to include the competition of gas companies then the law of demand would have more consideration. But in general--not specifically one gas station-- gas prices must be regulated according to my said arguments.

Reviewing the argument, I have concluded with my final statement for round 3. Gas prices must be regulated during the winter as to where gas stations would make the most profit out of what they can. Ideally, it should either stay relatively high or the same in comparison to gas prices in the summer. Due to the fact that drivers save/use "gas money", the demand for gas is inelastic, therefore, it is more influenced on the convenience of a driver and less influenced on the price.
ClassicRobert

Con


“Con, is basing this off of the law of demand which is understandable.”


This was not based on the law of demand at all, as law of demand deals with amount demanded, which only considers price and amount demanded as factors. This deals with a total shift of demand for gasoline, which was made clear in Round Two.


I am not assuming that price will increase in the winter. I as a matter of fact I understand that this is in violation of the law of demand. But since I am not assuming, I am stating that gas should be regulated in the winter as to where stations would make more profit. In other words, gas should stay relatively high in the winter.


My opponent now concedes that gas prices would decrease in the winter, which is contrary to his second round statement “Considering the law of demand (as price increases the demand decreases, the inverse relationship of the demand curve) it is most reasonable for gas prices to not decrease in the winter but to actually stay relatively high.” He now says that he is stating that “gas should be regulated in the winter as to where stations would make more profit… gas (prices) should stay relatively high in the winter.” This was addressed in my Round 2 rebuttal. Simply put, government regulation shifts the supply curve, and to raise the price of gas, it would need to reduce total supply. When supply is decreased, price is increased, but output is decreased. Even though it would be high in price, the gas stations would be selling less, so it is not necessarily true that profits would increase for the gas stations.


Con is simply misunderstanding my point of view.”


It is true, I have been misunderstanding my opponent’s point of view. However, this was unavoidable, as he did not specifically outline what his point of view was until the Round 3. In Round 1, he claimed that gas prices should be changed according seasonal travels. In Round 2, he made a largely untrue economic argument about gas prices in winter, with no mention of regulation whatsoever. It was not until this round that my opponent actually made his position clear, that “gas should be regulated in the winter as to where stations would make more profit.” Essentially, my opponent’s position, until now, was unclear, and for that reason, a misunderstanding was unavoidable.


“So Con is wrong when he states ‘compensation is not an issue.”


Raising prices for gas does not solve the compensation issue. It was already made clear above that when gas prices are increased through the supply instead of through demand, which is what regulation does, the gas stations aren’t selling as much gasoline, so they aren’t necessarily making more profit when gas prices are increased through regulation. Also, while my opponent has offered no proof that “the majority of the United States uses this ‘gas-money’ managing system, only a set price of their income is used to pay for their usual gas purchases,” for the sake of argument, I will assume it is true. If consumers go to a gas station only willing to spend a set amount of money, if they have increased gas prices, the gas stations have more money going towards gasoline than they have going towards their convenience store products, which have much larger profit margins. So when more of that set amount of “gas-money” is going towards gasoline, than less is going towards the gas station, as the gas station could be making more if more money went towards the convenience store items (1). So once again, when prices are higher for gas, the gas station is not necessarily making more money. So once again, compensation is not an issue.



Summary of the Debate


Pro did not state what position he was defending until the final round. On top of that, he has not shown that increasing prices of gas in the winter through government regulation would actually increase the profits for the gas stations, which is what his argument was centralized around.


I, as Con, have made my position clear throughout. Government regulation of gas prices to change the prices according to seasonal travels is not necessary, as supply and demand already changes them. Also, I have effectively refuted every point that pro has made. I have shown that artificially increasing gas prices through regulation during the winter does not increase profits for the gas stations.


Thank you



Sources:


http://www.freep.com...


Debate Round No. 3
No comments have been posted on this debate.
3 votes have been placed for this debate. Showing 1 through 3 records.
Vote Placed by Lizard 4 years ago
Lizard
FeioH-NiplefClassicRobertTied
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Reasons for voting decision: Pro's arguments were pretty hard t follow, partially due to S/G issues, but Con definitively showed a stronger understanding of the economics of gas prices.
Vote Placed by TUF 4 years ago
TUF
FeioH-NiplefClassicRobertTied
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Reasons for voting decision: Con gets arguments for presenting the msot accurate facts and logic in this debate. To begin with, as Con pointed out, gas prices currently do already change based on supply and demand, when people drive, etc. Also Pro was vague in his assertion that people drive more in the summer than they do in the winter. Considering that less people walk, bike, or train in the winter given the temperature, you would think it is the opposite, but Pro never provided a source for this information. So the fact that pro doesn't set a standard for whether gas prices should go up or down, precedents this debate to being a presentation of facts, in which Con was clearly more accurate. Pro did note that Con mis-understood him; in which case I may have mis-understood some of the non-coherency as well. But overall this is a pretty clear cut case by the Con, to result in his win of this debate. There were several grammar errors on the pro side of this debate, so S&G goes to Con as well. Good debate guys!
Vote Placed by RoyLatham 4 years ago
RoyLatham
FeioH-NiplefClassicRobertTied
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Reasons for voting decision: Pro was incoherent and unresponsive to Con's arguments. Con correctly described the supply and demand for gasoline. Pro seemed to arguing that supply and demand doesn't work, but he didn't come close to proving that. Pro should work on making a clear resolution with clear supporting contentions. Con could have cited past shortages from price controls under Carter.