Government Intervention in Gas Prices: Good or Bad? (REPORT)

Executive Summary As is now common knowledge, gasoline costs in recent months have surged beyond anyone's expectations. With this sudden and unfortunate turn of events, many have called for the reintroduction of government controls in the petroleum industry (be it in the forms of taxation, regulations or price controls). There stand a few valid arguments to each side; those in favour stating that fuel prices will drop, demand will increase and the economy will be …

…as well as statistical information, the reality is that no matter how well intended they may be, government interference with gas prices only make matters worse, and the safer alternative is to allow the market to go through its never-ending cycle of peaks and troughs. Taking an active role in meddling with the market is comparable to using a sledgehammer to crack open a walnut; too drastic and forceful a solution to possibly work out.