Who says we are forever doomed to pay these ever escalating gas prices? It doesn’t have to be that way. We AND OLD: Guangzhou - Baiyun (CAN / ZGGG) (closed), China">CAN make a difference. With a minimalist amount of effort, we Americans can bring gas prices back down to earth. Oh sure. There will be a number of Euro-Socialist wannabes out there who will gladly point out about how much more a LITER of “petrol” costs in Euros. Fine. If they want to live like European Socialists, and pay twice or thrice as much for gas, then let them go over there and do it. Or at least let them put their money where their mouth is and abandon their OWN cars first. But as an American, I feel it is my right to be able to drive one or more gas guzzlers on the cheap. And who is ANYONE to tell me otherwise? And judging from the number of trucks and SUV’s I see on the road, there is no shortage of people that will back me up on this.
But all snide narcissism aside, back to the topic. The beauty of my proposal is that it won’t take an act of Congress or an FBI probe or even rationing to do it. Instead, we can go about our normal business and beat the big oil companies at their own game. Let me explain.
First of all, make no mistake about it. Price gouging and collusion is all but certain to be happening. I’m stopping just short of making an actual accusation because I don’t have any hard proof and I don’t want to be sued. It doesn’t take a genius or an MBA to figure it out. But collusion, by its very clandestine nature, is difficult, if not impossible to actually prove. So we’ll have to settle on a “yes, we know it’s going on, but can’t really convict anyone for it” mentality. What other explanation can there be for gas prices being double for what they were just a few years ago, and the oil companies reporting matching profits to boot? As someone who spent nearly 4 years working in the “inside” daily operations side of gasoline logistics for a major company, I will say that yes there are certain vagaries that go on largely unseen by the public that can cause brief product supply issues, thus leading to higher prices, but nothing that is as chronic and expensive as Big Oil would like us to believe. The reason big oil continues to keep prices as high as they do is pitifully simple:
Because they can.
Stop and think about it. Where in the world is the incentive to lower gas prices to a dollar-fifty a gallon when you can sell the same gallon of gas for nearly double the price-with people buying almost as much? As long as people continue to pay these prices, they aren’t ever going to come down. And as much as people like to complain about it, as Americans in general and Californians in particular, asking us to give up our cars or settle for public transportation is simply not going to happen.
It just isn’t. As idealistic and lofty as all of those proposals sound, they just aren’t viable.
But I digress. So here’s my proposed solution:
A gas boycott.
Now before you get that look on your face, just hear me out. I’m not talking about these poorly orchestrated one day “gas outs” that Top 40 DJ’s and a few others like to assemble from time to time. I’m talking about singling out ONE Big Oil company and waging an ONGOING boycott.
These never work. There is no reason to expect that they should if you stop and think about it. One day gas boycotts are generally a lost cause because of the time frame involved. If someone announces a one day boycott, anyone who actually thinks they are participating is actually being counterproductive. This is because if the boycott is scheduled for-say-a Wednesday, then everyone knows that they will simply fill up their tanks on Tuesday or Thursday. In the end, they still bought the gas. What has been accomplished?
Pitifully, little. Nothing more than maybe a token mention on the back page of the local news section in the newspaper.
Second, they are never organized. What stations to not buy from? What cities? There are too many loose ends that simply do not allow these “gasouts” to work. Again, having worked in gasoline distribution, every filling station has volume fluctuations that can be predicted with fairly reliable accuracy. In the end, it’s a wash.
Now let’s look at my idea and why I think it would work. First of all, let’s start right at the top of the pyramid. Exxon-Mobil and Chevron-Texaco are the nations two largest oil companies. Let’s start with one, or both of them. Don’t buy from them. Not gas. Not car washes. Not even sodas or snacks. Nothing, until further notice. I’ll explain more about this in a minute.
Basically, the gist of it is that by not patronizing these companies for the long term, the very rules that they use to gouge us will backfire on them and force prices down. And the pressure will be both external AND internal. You see, if one company sees a dramatic drop in sales, they have but two choices: lower prices, or go out of business. Eventually, when the day comes that at-pump prices at Exxon-Mobil or Chevron-Texaco plummet in a desperate attempt to get business back, the remaining companies will have little choice but to match those much lower prices, or themselves face going out of business. Now granted, it won’t happen overnight. A boycott like this WILL take time. Time that will most likely be measured in months, or possibly even a year or two. But make no mistake about it: a prolonged large scale boycott WILL work.
Now for the internal pressure I inferred a paragraph back. Many gas stations, probably between a third and a half are actually owned and/or at least operated under lease by independents-often times a family. Most of their revenue does NOT come from gasoline sales. Most dealers operate on a margin of only a few cents. Sometimes only a penny if it’s located on a highly competitive corner. Most dealers make the bulk of their money in convenience store items-sodas, potato chips, beer, candy bars, and so on. The gas is just a reason to get you INTO the store. This is why more and more gas stations are becoming full service markets. Just look at ARCO-owned by BP (who also owns Amoco and Thrifty as well) for example. A decade ago, the most you could buy from most ARCO stations was maybe a pack of gum and a can of soda. Today, their revamped and newly built AM/PM’s (Also known as BP Connect east of the Rockies) offer everything from 24-choice fountain drinks, to hot and cold sandwiches to every kind of coffee imaginable to many types of general household goods.
The point I’m driving at is that if gasoline sales are halted at one outlet, then chances are, ALL sales will be halted as well. If enough stations are affected, there will be a backlash against the marketing and pricing division by both the dealers AND the shareholders to “do something about it.”
And what will that something be?
Lower the damn gas prices!
Now for one last thought. If you’re sitting there asking yourself “well what happens when the boycott is over?”
Well, hopefully Big Oil will have learned its lesson.
If they don’t, and gas prices start to escalate out of control again, then what do we do?
Start another boycott.