Got Gas?
The gasoline prices in this part of the country are around 3.20 (in USD) on a good day and about 3.40 in the “nice part of town”. Before my European friends start shouting, yes I know that is still only one fourth of what you pay out there, but that’s not what this is about. You have a budget, and when an essential ingredient of your daily life hikes up with about 30 percent, it’s gonna hurt. Whether you live in the US (where the gasoline prices are still ridiculously low) or in Europe where these prices are insanely high (by comparison).
Anyway, back to those rising fuel prices. You can’t turn the radio or TV on or there are people on talking about. It should come as no surprise then that I am also finding it in personal blogs. One idea that keeps circulating around the soc-nets and blogs is that consumers should force the price back down. The idea is simple…
If enough people avoid buying gas from one oil company, that company will be forced to lower their prices. At that point the other distributors will have to follow suit to stay competitive.
As with most things that sound to good to be true, this is another one of them. My apologies to people that think this can work. Surprise, surprise, I disagree. Matter of fact, I think you are nuts!
First of all there is the issue of mobilizing enough bodies. That’s hard work! For instance. Earth Hour is organized by an extremely professional bunch. They buy TV ads, space in the news paper, banner ads, you name it they’ve done it. And after all that, did I see any lights off on my evening walk? Not any more than usual. Furthermore, whether it’s a group of professionals or grass-roots type folks. Try putting one ad in the paper to boycott Exxon (or Shell, or Texaco, or, or, or). They will slap a lawsuit on you so quick you can’t even blink, keep you in court for years and drain you financially.
But even if you overcome that hurdle… You have to ask yourself: Where does this company get barrels of crude oil? Do they own their own oil fields? And if so, do they produce enough of it to turn it into fuel for your car? The price of a barrel of oil is a complicated matter. It’s not just controlled by the oil mogul you are boycotting. And by the way, if the oil company slashes their price for fuel, you may have just put your local filling station out of business. Gas stations make only a few cents per gallon. That’s why there is always a giant store behind it where they sell a bunch of other things. You can’t survive selling gas at retail prices. You need the up-sell, the cup of coffee, the donut, the pack of gum to make real money. As a gas station owner you have to sell fuel at a certain price. This is made up by what the oil company charges and what the competitor down the street is doing. If the retailer just had the tanks under his store filled for the whole sale price of 3.10 a gallon and the oil company decides to lower the price to three dollars, the poor guy now has to sell the remaining gasoline with a 10 cent loss.
Then there is the reaction of buyers to the changing prices. Say your boycotted filling station is going to lower their price by ten cents. With gas prices soaring, people who typically buy another brand of fuel are going to switch. So yes, the other brands will have to follow suit to stay competitive. But once they do, the playing field is leveled out again and now we are right back where we started. Again, that is assuming you can mobilize enough people to boycott the station of your choice.
But bigger than all that, transportation is one of the largest industries. Air, rail, road, water… They all need to “gas up”. the companies that transport goods (or people for that matter) are already seeing their profits diminishing. You yourself are feeling the effects when you go grocery shopping. Your dollar isn’t just going as far anymore. The stuff that goes into your cart is simply more expensive to ship to you. And while you may be able to pump your gas anywhere you want, A trucking company has far fewer options. Telling a truck driver he has to go 20 miles out of his way because he isn’t allowed to fuel up on brand X, is simply not viable. The truck now uses more gasoline to travel the same route, the driver will be on the road longer (and thus have to be paid more) and that 18-wheeler will put more polutants in the air. Surely we don’t want that!
If you want the gas prices to go down, you gotta stop wasting it. Buy a more fuel-efficient automobile. Stop spending billions of dollars topping of the tanks of Hummers in foreign desserts. In other words: end the war in Iraq. Sell of less of our own oil supplies to foreign nations and thereby become less dependent on foreign sources of the stuff. If you really want gas prices to come down, the smartest thing you can do is go vote!
April 21st, 2008 at 9:13 pm
Or the tanks of Hummers in local desserts
. Whatever the cause is, other countries using more energy (catching up with the US standard of consumption 
), not enough production capacity … one aswer is simple: reduce the amount you consume. Does a 4 door sedan really need a V6 engine and is 23 MPG really energy efficient (it is according to the local car sales ad in front me) ? I remember that my 1.7 liter turbo diesel Citroen Xantia actually had quite a decent sized engine back in the late 90’s for European standards. A 2.0 or more engine was a sign of an absolute top of the line model. When I moved here I couldn’t find a car with less than a 2.0 liter engine and any decent sized car had a 4.0 engine or more.
April 21st, 2008 at 9:23 pm
interesting… Don’t agree 100% totally (as with anyone) but this stuff will make you think. Would be nice to find a solution.
April 27th, 2008 at 7:53 am
Marco, “the tanks of hummers in local desserts” is repeating my point
I already said “Buy a more fuel-efficient automobile.” Yet, my neighbor just bought a new Nissan Titan V8. If you don’t know what that is, look it up. It’s a MONSTER. The roads are lined with Suburbans. If you aren’t a bus driver, who needs a passenger vehicle THAT big? When I bought a larger car a few years back, because we were constantly hauling people around, I felt guilty about the size. Nowadays, it’s dwarfed by bigger and bigger vehicles and… wait here is my next gripe… the people that clearly have no business driving anything that size. Vehicular size rule #1: If you can’t back the thing up into the space appointed by the parking lot attendant at a sports game (there are a 100 people waiting on you) you are driving to big of a car. That, and you are spending way to much money on getting to the game.
April 28th, 2008 at 9:04 am
Other size requirement:
being able to park it between to Amsterdammertjes (the poles lining the canals in Amsterdam). I always noted with amusement the dents that perfectly fitted a ‘Amsterdammertje’ in front and back bumpers on just about any large sedan in Amsterdam. Try fitting your Nissan Titan in there (okay, maybe the approach here is to just drive over the pole, but they are quite resistent to abuse, don’t know why they make them that way in Amsterdam
).
May 1st, 2008 at 7:51 am
Great article on the this subject by the way: http://money.cnn.com/2008/05/01/news/international/usgas_price/index.htm?cnn=yes
May 2nd, 2008 at 3:05 pm
Interesting item on NPR, listened to it while driving of course!
OPEC blames the weak dollar for the rise in gas prices. The OPEC stance is simple, The dollar is low so the same dollar doesn’t buy as much oil. US financial analysts took this one step further. The dollar is weak, therefore US investor are looking for ways to limit exposure to the dollar. One way to do this is to get out of financial instruments and invest in commodities. One such commodity is… OIL! So the dollar is weak, therefore oil prices go up. Investors see the oil price go up and, speculating on a price hike, start buying oil… It’s an amazing, self-serving, vicious circle you can’t get out of.