Thread

1. teiferer · 1790759150 · focus · HN ↗

   > A price cap meant as a cushion, in a system with no slack, turned a price shock into empty pumps

   It's almost s if economic theories actually describe reality! Given that it's economy 101 predicting that this would happen.

   Still, people do it again and again. Rent control proponents for housing should take notice.

   1. OtherShrezzing · 1790761347 · focus · HN ↗

      In this instance, the price cap is working exactly as intended. The state pushes Total to introduce a price cap by threatening a windfall tax on the industry as a whole. Total accepts, and introduces a voluntary price cap, selling at the below-market rate in a first-come-first serve regime (which it can afford to do, as it's an integrated producer). Total serves fuel to the majority of motorists at the below-rate price. When Total runs out of fuel, motorists who do a lot of travelling then need to pay the above-market rate at E.Leclerc instead.

      Without introducing an unpopular tax regime, the French govt has found a way to progressively increase prices for higher mileage motorists. Supplying most motorists at a reasonable price, while having high-mileage motorists pay the unsubsidised price for most of their petrol.

Unofficial Hacker News client; not affiliated with Y Combinator.