Tuesday, May 08, 2007

Something to think about - "Don't Buy Gas" emails

Thanks to the recent run-up in gas prices, many of our email accounts have become cluttered with chain emails asking us to boycott major gasoline stations on a certain date in the future. The reason being, we’re mad about having to pay so much for gas and if we all band together for one day and refuse to buy gas, we’re supposedly going to cost the major gas companies billions of dollars and force them to drop the price of gas. For those of you who continually forward these emails to everyone on your contact list, please stop. This is one of the most ridiculous ideas out there and it would never work.

There are plenty of extremely logical and obvious reasons why this tactic would never work, yet most of us tend to overlook these as we focus on trying to place blame for the huge jump in the price of gas since the end of February. As is usually the case, logic tends to take a backseat to emotion.

That being said, I’m going to try my best to explain why this idea won’t ever work in the real world and why you should automatically delete any emails like this that you may receive.

The first (and most obvious) reason is you are simply delaying the purchase of the gasoline you need; we’re not actually decreasing the demand for gas (which might bring the prices down), we’re just shifting the demand to another day in the very near future.

For example, let’s say that 100,000,000 people decide to join this boycott, which causes 1,000,000,000 fewer gallons of gasoline to be purchased on that particular day. In theory, this would cost the major gas and oil companies about $3 billion in revenue.

However, you mean to tell me that during the next couple of days that those 100,000,000 people aren’t going to go back to the gas stations to purchase the gas that they didn’t buy the day they were boycotting? Of course they’re going to; they still need all that gasoline in order to get to work, drive the kids to school, etc. There wasn’t a drop in demand, just a shift in demand - which means that the gas companies don’t actually lose the $3 billion in revenue, they just get it within the next couple of days.

The second reason is if for some insane reason this boycott tactic actually worked and did cause the gas companies to lose money, do you actually think that these companies would lower prices to gain back the small percentage of their total annual revenue that they lost? I highly doubt it. The more likely scenario would be these companies would actually slightly RAISE prices in order to try and collect some of the money that they may have lost.

Hopefully it has become pretty obvious that the only way we’re going to be able to save money on our car’s gasoline is to reduce the demand for gasoline by driving less and driving more fuel efficient vehicles. It’s not going to come by some crazy scenario where we boycott gasoline stations for one arbitrary day.

I hate filling the gas tanks, too. It feels like I am having to finance a tank of gas. Shifting the demand of gas to another day is not the answer. Please stop sending me those emails and bulletins! Sorry for the rant...I will step off my soap box now.

1 comment:

HomeSchool Mommy said...

Preach it, brother!