Gas war

Joined
27 June 2003
Messages
1,443
Location
Lenexa, KS, USA
Tony Yn sent the following to me today. What do you folks think?
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!!!! JOIN IN THE RESISTANCE !!!!

I hear we are going to hit close to $3.00 a gallon by the summer. Do you 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 $1.72 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 the sellers. With the price of gasoline going up more each day, we the consumers must 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 simple to do! Now, don't wimp 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 email 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.
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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.

This is a false sense of security. Now don't get me wrong, I'm not too keen on $3 gasoline; however, a purchasing "boycott" will not reduce gasoline cost. Refinery margins a so thin, that the true driver of the cost of gasoline is the cost of crude oil. Who sets crude oil prices? Futures traders for one. War for another. Sad but true, the motorist has no influence on gasoline prices, we are just along for the ride. No pun intended. BTW, I used to work for Shell.
 
Andy is right, that whole chain e-mail that's been going around for years is based on a lack of undertanding of the petro business and finance. Fuel is a major fungible commodity and as such market price is set by the commodity market, not the consumer. Individual retail stations can adjust their markup, as you can see when you drive around and see gas stations with different pump prices, but they have no control over their cost.

In short, trying to drive down gas prices by buying from one brand and not others is like trying to drive down the price of bananas by buying them at one supermarket and boycotting them at another.

At best you will cost a your local gas station owner some money. He is the only one who will be affected by such a plan. You can't touch the cost, it is set at a whole different level. And since it is a commodity, retail is not the only maket for them to sell the gas. If they end up with more than they need, they can just sell it to another retailer. And of course they are all heavily hedged with futures, etc. anyway to protect them against swings in the market price.

The proof that the theory behind this e-mail is flawed is the fact that it's been circulating for years with no impact on gas prices.

If you REALLY want to reduce the price of gas, buy a fuel-efficient vehicle and reduce consumption (and thus demand). That is the only way consumers can have an impact, and the impact would be huge if everyone ditched their 15 - 20 MPG vehicles and replaced them with vehicles that got 35 - 40 MPG. Of course OPEC and similar can then cut production to reduce supply and try to keep prices up, but that's a whole different post. And the less we consume the less power they have in that regard.
 
I saw a TV special on gas production and US dependence on foreign oil.

They stated that (at the time - filmed several years ago) if everyone in the US drove cars that averaged at least 40 mpg (and they said there were several such cars for sale) that the US was capable of ramping domestic production up and meeting 100% of it's own need. I know that would take an act of congress to drill everywhere we have oil but it was a valid point none the less.
 
I'm doing this from memory, but some things to consider.

The political pin heads insisted on a investigation of the oil companys several years ago fueled by activist groups and public outrage that they were pricing to pad profits. They found nothing other than what Andy mentioned that profit margins were very slim. These fortune 500 co. were making nearly the same as other non-oil based companies as a average and no wrong doing could be found.

What these company execs and folks in the know said and find out. Due to Gvnmt. regulations the blends of gasoline had to be changed to meet differing seasonal standards throughout the country. These new rules were being applyied meant you couldn't sell the same gas from winter to summer (etc). I even read the other day that gas was different from Phoenix to Tuscon and that was taking place in numerous other places in the country which contribute of costs. Can't sell the same gas in KC as in Chicago, on and on. You compound that with manufacturing facilities having to formulate numerous gasoline blends for numerous regions, futures, OPEC, transportation costs, additional EPA regulations that prevent companies from building new facilities, pipelines and exploration to keep up w/demand and rule changes.....this is the result.
We get stiffed.....

Remember the power grid failure a few months ago. We learned how it happened and also the fact that no improvements have been made to the current system for years, thus it could happen again if plants cannot be built. Conversly, much of the same thing going on here.

Boycott is a poor idea.
 
I think the email is ridiculous, especially when you consider that ExxonMobil is now one company.

Here in the US, we have too little supply and too much demand. The only way to really fix that is attack the problem from both ends.
 
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