Want lower gas prices? Then consider this

[Old_Man_Time]

I have read about a plan that will definately lower the price of gas back to a dollar thirty a gallon if we could get our fellowl Americans to cooperate and it does not involve not driving your cars or motorcycles. Are you interested? Well here is a copy of the email that a friend sent me:

Subject: GAS WAR!

Join the resistance!!!! I hear we are going to hit close to $3.00 a gallon by the summer and it might go higher!! Want gasoline prices to come down? We need to take some intelligent, united action.

Phillip Hollsworth, offered this good idea: This makes MUCH MORE SENSE than the "don't buy gas on a certain day" campaign that was going around last April or May! The oil companies just laughed at that because they knew we wouldn't continue to "hurt" ourselves by refusing to buy gas. It was more of an inconvenience to us than it was a problem for them. BUT, whoever thought of this idea, has come up with a plan that can really work.

Please read it and join with us! By now you're probably thinking gasoline priced at about $1.50 is super cheap. Me too! It is currently $2.09 for regular unleaded in my town. Now that the oil companies and the OPEC nations have conditioned us to think that the cost! of a gallon of gas is CHEAP at $1.50- $1.75, we need to take aggressive action to teach them that BUYERS control the marketplace....not sellers. With the price of gasoline going up more each day, we consumers need to take action. The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And we can do that WITHOUT hurting ourselves. How? Since we all rely on our cars, we can't just stop buying gas. But we CAN have an impact on gas prices if we all act together to force a price war.

Here's the idea: For the rest of this year, DON'T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit. But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It's really simple to do!! Now, don't whimp out on me at this point...keep reading and I'll explain how simple it is to reach millions of people!!

I am sending this note to about thirty people. If each of you send it to at least ten more (30 x 10 = 300) ... and those 300 send it to at least ten more (300 x 10 = 3,000)...and so on, by the time the message reaches the sixth generation of people, we will have reached over THREE MILLION consumers. If those three million get excited and ! pass this on to ten friends each, then 30 million people will have been contacted! If it goes one level further, you guessed it..... THREE HUNDRED MILLION PEOPLE!!!

Again, all You have to do is send this to 10 people. That's all. (If you don't understand how we can reach 300 million and all you have to do is send this to 10 people.... Well, let's face it, you just aren't a mathematician. But I am ... so trust me on this one.)

How long would all that take? If each of us sends this e-mail out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!!! I'll bet you didn't think you and I had that much potential, did you! Acting together we can make a difference.

If this makes sense to you, please pass this message on. PLEASE HOLD OUT UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN. THIS CAN REALLY WORK. Kerry Lyle, Director, Research Coordinator

Interventional Cardiology Research Laboratories Division of Cardiovascular Diseases

932 Ziegler Research Bldg

703 South 19th Street University of Alabama @ B'ham

Birmingham, Al 35294-0007 Phone: (205) 934-6163 Fax: (205) 934-7360

[frankstr]

I'm game, I'll try anything once, Well almost anything.....

Lower gas price's would be coool...

[mvanbogart]

Better yet, do what I did and buy some stock in Exxon/Mobil.

[Jeremiah]

Sorry, but it won't work. I don't mean to be a pessimist, but we've got to look at the economics of the situation. Prices are essentially set by supply and demand, (with a few other factors such as futures speculation). We, the US, is completely maxed out on our refinery capacity. I have a number of friends who live in Houston, TX that work/ed for Exxon and can confirm this. If supply is limited, and demand is increasing, then prices increase. Basic economics.

The effect of price increases is exaggerated when there is a problem at the refineries. For example, there was a relatively large explosion at an Exxon refinery near Houston just a couple of weeks ago. When anything happens that either affects, or could even potentially affect, the supply of gasoline, then prices increase based on the fact that investors expect an increase in prices, which helps to increase prices, and we see...(ta da!)...a price increase. It's a bit of the chicken and the egg syndrome, but that's the way it works.

So, it will be near impossible to affect gas prices by boycotting Exxon/Mobil. I wish it were that simple, but it won't work.

[EM_rider]

You are kidding right?

Oil and gas are fungible commodities. Your "strategy" won't work.

[velosapiens]

what if you want prices to go higher? i think $3/gallon is reasonable. it means i'll be saving even more when i ride my bicycle to work.

[Old_Man_Time]

You pessimists could be right or you could be believing and repeating the programing that the oil companies want us to believe so we won't try something like this. I have long been skeptical of the power of boycotts simply because I do not believe you can get enough people on board to make them effective. Never the less I believe they would work if the masses complied.

Same with this idea which, is not my idea but I like the concept. I too have read reasons why such a thing cannot work but I am suspicious of the sources behind such reasoning. That's not to say they are wrong but how do we really know these skeptics are right if we don't make a long term (the rest of the year) effort to find out.

What if it did work?

I spend 135 dollars a month (conservative estimate) on gas. I am by far a small time user. Now this is at 2.19 cents a gallon. That is approximately 61.5 gallons a month. That means in a year I use 738 gallons of gas which translates into $1,616.22 a year at $2.19 a gallon. At $3.00 a gallon it would be $2214.00 and at $4.00 a gallon it would be $2952.00.

At $1.30 cents a gallon my yearly expenditure would be $959.40. So best case scenario I save in a year 656.82 and at the worst case scenario I would save $1992.60.

My usage up above does not include the extra gas used on trips and vacations which are not a part of my regular useage. My needs are modest compared to some. For those of us on a somewhat limited income; $1,000.00 to $2000.00 a year saving is important.

Is it worth trying or not? That depends what economic level you live at. For many it would not be worth it but for the majority of average Americans I think that is a meaningful savings if it worked.

PS

If it didn't work we would lose nothing. We would still use gas just not the Largest Companies gas. If it failed we would just have more options as to where we buy gas cause we would no longer be boycotting the big companies. Nothing to lose by trying.

[cbrxx2]

Back to the economics of the issue. A boycott means we have essentailly taken a large percentage of the supply off the market. ie Exxon/Mobil production. This further constrains supply meaning the remaining suppliers raise prices and your plan backfires. Shell raises prices to $3.50. Or, the remaining suppliers buy the excess from Exxon/Mobil and prices still increase due to more middlemen. Then, Exxon at $3.00 seems pretty good huh? And the boycott is over. People switch and the boycott is over.

Price is a function of supply/demand. Total supply/demand. To affect a change in price, one must create a change in total demand given a constant supply.

My $.02

[Waxy]

Two MAJOR problems with the plan-

1. Exxon and Mobil are one and the same company.

2. The law of supply and demand.

It won't work.

It might make you feel a little better though, so go ahead and try it.

Waxy

[Jeremiah]

Back to the economics of the issue. A boycott means we have essentailly taken a large percentage of the supply off the market. ie Exxon/Mobil production. This further constrains supply meaning the remaining suppliers raise prices and your plan backfires. Shell raises prices to $3.50. Or, the remaining suppliers buy the excess from Exxon/Mobil and prices still increase due to more middlemen. Then, Exxon at $3.00 seems pretty good huh? And the boycott is over. People switch and the boycott is over.

Price is a function of supply/demand. Total supply/demand. To affect a change in price, one must create a change in total demand given a constant supply.

My $.02

Essentially, you've got it right, but a boycott would not "essentailly take a large percentage of the supply off the market." A true boycott would reduce demand and shift the curve down (left), and price would decrease. A boycott wouldn't affect supply.

[jha07]

We're already at over $1 CND per Litre. That's equal to $3.10 US per gallon. I hear $1.20 is to be expected over the summer. Oh well, I'll be riding my DRZ to work by then

[Old_Man_Time]

The fact that many will not even try it as is evidenced in this thread. They have already decided it will not work and that the high prices are inevitable. And that is fine, we all have a right to believe and do what we want about such things.

I have read all the Supply and Demand arguements and why this will not work but they are all approaching this with one scenario in mind as if there is no other possibility. In fact many of them are just paroting arguments made in a professionally written article I read before I ever posted this explaining why it won't work. But just maybe economics and the system have more scenarios or possibilities than their straw man arguments against this will allow. Maybe it is much more complicated than the basic economic scenarios that have been presented.

Let me suggest a supply and demand argument on company by company basis instead of just assuming that all the companies stand or fall together which is what many are doing here.

Supply and demand begins at the oil fields. So "Big Company A" cannot unload the fuel and oil products they produced from the unprocessed oil purchased. This is because they are being boycotted. They no longer have room to store more oil so they must quit purchasing raw oil from the fields. Their profit margin begins to drop.

"Big Company B" which is not being boycotted begins to sell more product than projected and they begin to purchase more raw oil from the source to meet demand. They may even begin to raise the price of their fuel due to demand if they cannot get enough product to meet demand.

At this point it is assumed by some that "Big Company B" must purchase their product from "Big Company A's" unsellable surplus at esculated prices. Thus raising the cost of gas even more than it would have if we did not boycott. But why would they do this when they could now purchase more raw product from the same suppliers that "Big Company A" used to purchase from. The supplier now has an an excess of raw product that "Big Company A" used to purchase from them. So the supplier now sells it to "Big Company B" and they continue to produce their product at the same price as before we all began to buy from them. "Big Company B" says supply and demand and they begin to raise their price. So now we get higher prices anyway even though we are boycotting and it's not really costing them anymore to produce their product. They begin to circulate stories that it is costing them more to obtain raw product. This is to be expected. It's called GREED.

What's wrong with this picture? The assumption that "Big Company A" will stand by and let this happen. They are in buisness to stay in buisness and at this point there is only one way to unload their stock and to keep purchasing their raw product at the same levels they are accustomed. So "Big Company A" does begin to drop the price of their product which catches the attention of now "Bigger Company B". Yet we continue to buy from "Big Company B" in spite of the fact that their prices are higher. We have a goal in mind and have determined to lower gas prices by creating a air of competition between the Companies. At the right time the consumer switches to the lower priced company. This creates for "Big Company B" a similar situation that existed in "Big Company A" when they were successfully boycotted. So they begin to compete for the patronage of the customer. It would seem logical that the competition would only be temporary and at some point the whole process would have to start over.

I still say if high prices are inevitable then it will not hurt us to try nor will it raise the price of gasoline any higher than it will go anyway. It sounds like scare tactics or apathy so suggest that prices are going to get higher because of our actions or lack of actions.

I still have this lingering question in the back of my mind: Who has the most to gain by convincing us this will not work? Us or the big oil companies?

Oh well, what will be will be, right?

[russhenry]

I agree with you Nick. The supply and demand argument against the idea did not consider the effect of competition on price.

[Waxy]

Old Man Time,

This seems to be a topic you're genuinely interested in.

You should do some research on the refining industry in the USA and Canada, as well as source feedstocks and the petroleum distribution network - ie how individual oil companies actually acquire, produce and distribute the gasoline they sell to you at the pumps.

It might shed some further light on why your proposal is doomed to begin with, and you might find it very interesting. I suspect you'll find it very aggravating.

I'll give you a hint by saying this, gas is gas, diesel is diesel, it doesn't really matter which pump you buy it from, ultimately it all comes from one of a very few sources.

Waxy

P.S. Here's another thought - what about all the station owners, employees, and even the average person working at Company A? What about the conseqences of the plan for those people that you've chosen randomly?

[Old_Man_Time]

Old Man Time,

This seems to be a topic you're genuinely interested in.

You should do some research on the refining industry in the USA and Canada, as well as source feedstocks and the petroleum distribution network - ie how individual oil companies actually acquire, produce and distribute the gasoline they sell to you at the pumps.

It might shed some further light on why your proposal is doomed to begin with, and you might find it very interesting. I suspect you'll find it very aggravating.

I'll give you a hint by saying this, gas is gas, diesel is diesel, it doesn't really matter which pump you buy it from, ultimately it all comes from one of a very few sources.

Waxy

Actually the antiboycotting article that I read on this subject covered all this information and if I remember right they listed something like three or four major sources. The middle east supplies less than 50% of our oil needs. In fact several in this thread have quoted from this article. It seemed to be a rather thourough expose on why it will not work to boycott individual companies in order to prevent the middle east from profitting. You see, the main reason the article was written was not to suggest prices couldn't be lowered.That article was written in response to a similar plan as I posted here that was circulated on the internet but with a different motive than lowering prices. It was suggested by some that when we buy pump gas from the largest of the oil companies that we are supplying terrorists with the billions of dollars that they use against us. The assumption being that only certain of the larger companies depended heavily on Middle East oil. The article showed how boycotting the larger companies will never stop the middle east from getting their money and that the smaller companies end up buying some of their oils from the same sources as the large companies. The article showed that if the Terrorists were being funded through our oil purchases (the article did not concede this as valid), our boycotting some of the larger companies would not succeed in preventing the money from getting there. That is when the article went into sources and how the companies aquire fuel and so on.

Aggravating? Yes. GREED is always aggravating cause there is little reasoning nor compassion involved in it. But still this article was not about lowering prices through boycotting but rather preventing terrorist profiting by boycotting.

The point still remains. We really have nothing to lose by trying.

[DaveL]

Better yet, do what I did and buy some stock in Exxon/Mobil.

Dayum! Wish I'd have done that (and bought msoft in the early 90's)!

Dave

[mxrider227]

OMT where can i find this article you are refering to?

[Old_Man_Time]

Here is a link to the article. If you follow some of the possible true outcomes of a boycott of the major companies it plays right into the scenario I put forth.Not to prevent financing terrorism which is the subject of the article. But to lower the price of gas which is not dealt with in the article. Remember the article is not addressing the price of gas at all. It is filled with statistics and facts and tells you where they can be verified. I have not yet taken the time to verify them. Read it and let me know what you think.

www.snopes.com/politics/business/saudigas.asp

[Rich_Fish]

Couple things ,

1) depending on what region of the US you live in determines where your crude oil comes from. For example most of the crude used out east comes from Arab counties where as the midwest obtains most of its supply from north american sources ie texas and or Alaska region.

2) Touched on by another smart person. There are very few oil refineries thru-out the good ol USA . Hate to say it but the Amoco gas or the Shell gas is pretty much refined in the same plant in a said region. Change the additive package or just call it a different name it is pretty much the same product. Throw into the mix that alot of name brand gas stations are independently own means that the owners like the consumers are shopping for the best price in gas also....

3) Speaking of refineries there are fewer now then there was lets say 20 years ago . Add that to the fact that most of these refineries are not on the "fore front of modern technology" . Want to lower the price of gas , then see that more refineries are built along with up grading and improving current refineries. The problem with the later is most of the current refineries are allready running at 110%+ capacity so what happens when you go to shut one down for even routine maintenance ? You guessed the price of gas goes up. Perhaps not across the entire US but enough to affect large regions...

4) So why aren't refineries sprouting up like corn in a field on a day in May? Easy enough, if a local business owner who wants to build a indoor motocross track has to trudge thru months to years worth of EPA and Environmental Impact studies just think what kind of crap you would have to wade thru to build a refinery. Of course let us not forget the "No in my backyard" whiners, who will bitch about the price of gas while filling up the H2 in burbs but get pissed off with the thought of having a refinery loom in the distance of there favorite golf course or gated community.

[mxrider227]

Here is a link to the article. If you follow some of the possible true outcomes of a boycott of the major companies it plays right into the scenario I put forth.Not to prevent financing terrorism which is the subject of the article. But to lower the price of gas which is not dealt with in the article. Remember the article is not addressing the price of gas at all. It is filled with statistics and facts and tells you where they can be verified. I have not yet taken the time to verify them. Read it and let me know what you think.

www.snopes.com/politics/business/saudigas.asp

Thanks i'll give it a look.