When a gas station increases the price at the pump, they should be required to sell it at the new higher price for, say, seven days before lowering it again.
With this rule, a gas station that increases its price too much too soon will get stuck being the only one selling at that high price for a whole week, during which drivers will buy their gas elsewhere. Every time this happens, they may lose a week's worth of revenue, which is about 2% of their annual revenue.
Gas stations will be forced to absorb price fluctuations to keep their prices competitive. They'll have to keep inventories higher so that they can ride out whatever supply situations they normally use to justify raising prices. They may need a cash reserve on hand in case they do get stuck with lower revenues for a week. Existing competition laws will make it illegal for different companies to agree to keep their prices high and nullify this effect.
What do you think?