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Originally Posted by scaeagles
Let's say the cost of production of a gallon of gas goes to 2.50. That's production only. Let's say a price control in Hawaii says wholesale gas can only go for 2.40. What happens? The oil companies won't be selling gas in Hawaii.
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But it won't. The price control is based on market price elsewhere and has built in allowances for shipping costs. It's simply to ensure they aren't gouging above and beyond mainland market price, it's a formula that will never allow it to drop below production cost.