You are describing a natural monopoly and why private ownership of it sucks. That is the whole point.
Gas stations are a natural monopoly. You cannot have twenty competing pipelines running to the same neighborhood. You cannot have fifteen different refinery complexes in every city. The infrastructure is too expensive and too duplicative. So what happens is a handful of companies end up owning everything and they just coordinate as a cartel instead of competing.
PetroCanada used to be a crown corporation. It existed precisely because we recognized that fuel distribution is too important to leave to private profit extraction. It kept prices honest because there was a public option that could undercut the private cartels. Then we privatized it and pretended the market would fix everything. Surprise surprise it did not.
The core problem is not algorithms or Gas Buddy or tax holidays. The core problem is that we allowed a natural monopoly to operate as a for profit business. When one company owns twelve thousand gas stations and the other three companies own similar numbers there is no competition. Market based pricing really means that a group of executives in a boardroom decide what number makes them the most money and then they all charge that number.
This is exactly why socialists argue for public ownership of critical infrastructure. Fuel distribution is a natural monopoly. Either the state owns it and sets prices at cost plus a reasonable margin or a cartel owns it and extracts every cent they can get away with. There is no third option where competition magically appears.
You are describing a natural monopoly and why private ownership of it sucks. That is the whole point.
Gas stations are a natural monopoly. You cannot have twenty competing pipelines running to the same neighborhood. You cannot have fifteen different refinery complexes in every city. The infrastructure is too expensive and too duplicative. So what happens is a handful of companies end up owning everything and they just coordinate as a cartel instead of competing.
PetroCanada used to be a crown corporation. It existed precisely because we recognized that fuel distribution is too important to leave to private profit extraction. It kept prices honest because there was a public option that could undercut the private cartels. Then we privatized it and pretended the market would fix everything. Surprise surprise it did not.
The core problem is not algorithms or Gas Buddy or tax holidays. The core problem is that we allowed a natural monopoly to operate as a for profit business. When one company owns twelve thousand gas stations and the other three companies own similar numbers there is no competition. Market based pricing really means that a group of executives in a boardroom decide what number makes them the most money and then they all charge that number.
This is exactly why socialists argue for public ownership of critical infrastructure. Fuel distribution is a natural monopoly. Either the state owns it and sets prices at cost plus a reasonable margin or a cartel owns it and extracts every cent they can get away with. There is no third option where competition magically appears.