[Beskargam]

The point is that "invisible hand" advocates for free-market principles universally tout the benefits of the free market because competition purportedly brings prices down, .

Did they tell what ?
The benefit of a free market is a free, decentralized and efficient price fixing. It's about efficiency, not about low prices.

The advocates of socialism don't care about efficiency, the care about moral, so the price would be fixed by persons with a higher moral standard than the average human. No greed, only the best for the people (low prices for fuel) or the planet (high prices for fuel). That's much better than greed, isn't it ?

How would price fixing would work without free market ?
The central price fixing agency determinates the during the holiday season the price will be lowered, and also determinates that more fuel is delivered to the gas station because of the higher demands ?
Delivering more fuel to the gas station is more expensive, but because the people have a right for cheap fuel the good guys from the fixing agency don't charge more ?

No economist, but wut? Aren't you pretty much describing what the Soviet Union tried? And it did not work. Ideally, that sounds nice, but why would people want to do business that way? The gas station owners would get screwed in that deal, and people would leave the trade.

[Phantom Hoover]

yes, he's describing a strawman of left-wing economic policies where the economy must bend to the arbitrary dictate of some bleeding-heart tyrant

[Mikes]

so, im not quite sure why we can be so sure that this price fixing must be limited to Europe.

It's not.  There is no way a $0.12/L jump in price THE DAY BEFORE A LONG WEEKEND is market forces at work, particularly because there is no way every gas station in the city got filled up on the same day with the same batch from the refineries.

Free market competition brings prices down, my ass.

In theory... at least one gas station would have to go: "Oh everyone is raising prices on that day!!! If I do not raise price / keep them lower, then everyone will buy at my gas station! I just have to change my gas delivery schedule a little and I can screw them all over on that day."

If that is not happening, that may indeed be an indicator for something fishy going on.

Well... *fishy* as far as the theory of the holy free market economy that fixes everything goes ( ) - *expected* as far as human behavior goes.



The thing with both central planning and the free market economy is that both of them are full of simplistic bull**** that doesn't really explain at all how our rather complex society works.
The problem is that only one of those theories has so far been thoroughly discredited while the other still has firm believers gobbling up its half truths and doing untold damage in the process.
(Granted, central planning is even worse because comes with so much extra hubris pretending a complex economic system could even be controlled centrally.)

- and that *analysis* goes back as far as Luhmann

- that it's not highly popular reading in lectures about economic theory only shows us that too many people at universities are reading the wrong books about human behavior. (I.e. the idiotic ones that pretend that humans always act rationally and use simplistic models that pretty much boil down to: it's rational to be greedy. i.e. all books about economic theory in existence.) Why? Because simplistic economic theory is easier to learn and gobble up than facing up to a rather complex reality. Part of the problem.

It's a similar problem to that of Communism and Central Planning really: i.e. Nice theor(ies)... too bad reality (i.e. human behavior) doesn't quite agree with them.
The difference is that as Communism and it's centrally planned economy failed, itwas easy to simply fully embrace the alternative. Now that we don't really have an alternate theory we cling even harder to what we have, while glossing over the flaws - instead of working on them.  - Even while the house is pretty much on fire and coming down around us with crisis after crisis and no (good) end in sight.

[Al-Rik]

In theory... at least one gas station would have to go: "Oh everyone is raising prices on that day!!! If I do not raise price / keep them lower, then everyone will buy at my gas station! I just have to change my gas delivery schedule a little and I can screw them all over on that day."

A friend of mine has took a franchisee from ESSO (Exxon). He sells their gas, and get one cent per litre, no matter that the price is. Pricing is done by ESSO, and he has no chance to modify the price.
He makes most of his profit with selling groceries, coffee, newspapers, soft drinks and beer.
The gas station is 24/7 open, and has a licence to sell beverages and fresh food (pizza, burgers, hot dogs...)

Cheap gas has only the effect that he sells more coffee on that day...
To attract customers he don't lower the price for gas (he can't do that anyway), but he give away for example a six pack of beer cans for the price of five cans.
His benefit is the better support (central buying of the goods for his market, marketing, loans, law and tax advices, courses in business administration) he gets from the franchiser.

Selling gas is a necessary to run such a 24/7 super market nowadays, so there are other market mechanisms more important for him than the gas price.

In Austria they have made a law that limits the time for price rises to once in a day at 12.00 am.
Australia introduced a similiar model in 2001: http://en.wikipedia.org/wiki/FuelWatch

The German Federal Agency against Cartels made an evaluation about the fuel market in Germany an one conclusion was one problem is the market transparency.
The big company's don't hat to fix the prices by agreement, they have just to  take a look at the price signs of the other company's.
3 Hours after one company has increased the price the others tend to do the same.
http://www.bundeskartellamt.de/wEnglisch/News/Archiv/ArchivNews2011/2011_10_10.php

Planned is a governmental website for all kind of traffic information, from actual traffic jams and closed roads/bridges up to actual fuel prices - but I doubt that it would help.
The price difference is on average 5 Euro cent per litre, so a full tank (40 litre) from the cheapest gas station would be 2 Euros cheaper. That's the price for 2 hamburgers at Mc Donalds or a cup of coffee at the gas station.
Nerveless I tend to never let fall down my cars fuel under 25% - 50%, and than buy at the cheapest station.

[LHN91]

I work at an ESSO, myself. 24/7 store and everything. Nightly price change happens at midnight, based on notification from head office of the price to set at around 6 PM. During the day, the manager/owner is expected to monitor specific stations identified as direct competition for prices lower than ours (we generally don't adjust up - head office tends to price us high and then we adjust down to status quo), and we call Survey and report those prices, generally receiving an automated call with the new price within 10-20 minutes.

Much as Al-Rik noted, most of the profit is made on, in our case, Cigarettes and Lottery (no alcohol at convenience stores in Ontario). We make significantly less than a cent per litre on fuel.