Gas Face Special: Behind the boycotts, why they don’t work
Have you ever received one of those “boycott the gas station” e-mails? In the aftermath of Hurricane Katrina, gas prices shot up and I got my first e-mail with the subject line “FW: Don’t get gas from ExxonMobil.” Soon after, I received “Don’t buy gasoline on 9/1/05.”
I was irritated by the high prices but, unfortunately neither one of these plans would provide a solution. Let’s debunk the myths.
Boycott#1: Don’t buy gas from ExxonMobil.
Desired result: ExxonMobil will have excess supply and be forced to lower prices. Other stations will have to follow.
Why it will not work: Oil companies sell oil to refiners. Refiners sell to distributors, who in turn sell the oil to station owners. There is no exclusivity in this process. Just for the sake of an example, gas originating from ExxonMobil’s oil can be used to fill up a BPAmoco station. So, if we all boycotted Exxon Mobil, their stations would have a surplus of gas. Our new stations of choice would then face shortages. The stations with shortages will then be forced to buy from companies who have a surplus. Who would be at the top of list? Our beloved boycott victim: ExxonMobil.
Boycott #2: Don’t buy gas on 9/1/05.
Desired result: Excess supply will cause prices to instantly decrease.
Why it will not work: The excess supply caused by a one-day boycott would end up being used quickly anyway. People will still drive and thus consume the same amount of gas. Whether it is purchased the day before or the day after the proposed boycott, it will be purchased. That’s really all that matters.
Bottom line on these boycotts: Unless the masses permanently decrease consumption, these methods will not effectively influence prices.
Leave a comment and cast your vote for “Who gets the gas face” now!
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POSTED IN: Commodities, Economy, Market, Uncategorized
7 opinions for Gas Face Special: Behind the boycotts, why they don’t work
K. Walters
May 20, 2008 at 11:10 am
I agree! I have seen many facebook groups with a similar logic, but most fail to realize exactly what you stated above–that there is no exclusivity of gas. It will be used one way or another, no matter who the company may be.
Mike Cassarino
May 20, 2008 at 12:32 pm
It’s funny that you have this post because I was just enlightening a friend of mine on this topic. He was trying to get me to join a facebook group dedicated to the objective. I told him that most of these second hand gas stations have ties to ExxonMobil which you stated in your blog. I just sent him your piece tell let him know that I’m not the only one that thinks this. Nicely put.
J. Brustman
May 20, 2008 at 1:19 pm
I agree…neither of these “solutions” work. Everyone complains about the increasing prices of gasoline, but we do not stop the consumption of it. The only way to decrease/get out of the bind we are in is to decrease our consumption of it and look to alternatives.
Dan Ahearn
May 20, 2008 at 8:10 pm
I agree with the first couple of comments, I feel like every week I get invited to a “boycott gas stations day.” Just recently, May 15 was one of these events. Hundreds of thousands of people responded to attend, but of course, gas prices did not go down. As stated in your blog, none of these events would work. As for now, we just have to suck it up and deal with the high prices. Eventually an alternate fuel system will ease the pricing, but there is no telling when that will be.
kate iannelli
May 20, 2008 at 11:45 pm
It is certainly interesting to learn the real reason as to why boycotts do not work. News reports rarely mention the interdependence between gas stations and distributors. I heard a different view the other week, that Americans have the ability to drill oil off the coast of California, but choose not to. Essentially, in exchange for preserving refuge areas, Americans are choosing to pay a premium for gas.
Lindsay Kostelnik
May 21, 2008 at 10:47 am
I agree that a limited boycott of one oil company will have no effect on the price of oil. Such a boycott would only have an effect of making a statement and bringing attention to the high cost of oil and gasoline.
In my opinion, the price of oil is not only related to current supply and demand, but also to speculation that supplies may be disrupted. There is currently sufficient supply to meet current demands, but oil traders are driving the price of oil to record highs probably because of fears of disruption of oil supplies by violence in the Middle East or elsewhere.
One positive effect of record high oil prices, is that people are focusing more on alternative energy sources like solar, wind, geothermal and fuel cells/hydrogen.
The bottom line to me is that oil prices will only recede when global supply is securely increased and/or demand decreases. Each of us can
affect the demand side by actions such as combining errand trips, car pooling, slowing down and using public transportation.
James Gakos
May 23, 2008 at 3:24 pm
I agree with the above. I get invited to many of those facebook groups to boycott the gas stations. The fact is that I still have to drive to work and other locations of my choice. If i were to boycott the station for one day; i would just have to fill up my tank the day before. Gas prices are rediculous and are only going to go up more during the summer because of beach/vacation travel (increased demand).
I agree with Lindsay above that we must turn toward alternative energy sources and more fuel efficient vehicles. The bottom line is that companies will produce the products that we demand. In the past two years with the large increases in gas prices, people have demanded more fuel efficient cars. This demand has caused many car companies to make small compacts that get around 30 mpg.
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