Jason

This is a copy of the e-mail I received yesterday. Are you game?

-Jason

Subject: Gas prices
New strategy that makes sense... they're at it again...

Join the resistance!!!!

I hear we are going to hit close to $3.00 a gallon by the summer. 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 $1.97 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 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 I 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.

Stevestr

Not this spam again. Every time the gas price goes up this spam starts to circulate.

It's only 1.97 for gas by you? Regular here has topped 2.14 and premium is running around 2.37

Jason

I doubt it will work but I'm willing to give it a shot. I don't like the gas companies anyway. BTW, do you really need the quotes in your post? I know what post you were responding to.

iamhomin

It may work if all complies, but I highly doubt the suggestion will have a high success rate. Anyways, 2+ for gas? Wow. In NJ, it's only 1.77/g for premium -_-;

Jason

Are you gonna try it?

James

i dont know if that will help but its sure worth a try... i paid 2.57 FOR PREMIUM TODAY... $2.57..... :-\

Crazytree

Slightly OT:

Next time some birdbrain tells you that when you adjust for inflation... gas is cheaper than it was in 1953...

inform him that there have been vast technological advances in exploration, extraction, refining, distribution and sales that have VASTLY decreased the marginal cost of producing gasoline.

bob shiftright

Wholesale Nymex Gasoline last closed at $1.0695/gallon.

Add a few pennies per gallon for transportation and dealer markup.

The rest is taxes.

I'm last paid about $1.90 per gallon for Sunoco Ultra 94 octane Wednesday which is less than the cost of the bottle of water in the cup holder. My wife and I both drive over 20k miles annually and gasoline is hardly any sort of a major expense for us.

gogozy

i like the idea; but i think one year is too long, we also need to consider there are other consumer who are not price sensitive. if everone concern about gas price or consumption, we won't be seening so many SUVs... but there are no mobile nor exxon here in Canada

DEVO

you want to change the market... join a campaign or do something like buy a car that is more effiecient... like a hybrid (I did, and I didn't do for a political statement,, I did it because it works)

what the market has done, is condition you that gas is the only fuel source when other exist... forget about it being cheap or expensive.

Jason

You be quiet Bob! :P

jcg878

I haven't been to Exxon 10 times since the Valdeez spill, and I haven't shut them down yet

bob shiftright

HOW MUCH are you paying up in Canada???

Since a large chunk is taxes, maybe it's time for you northern monarchists to throw the tea into the harbor, too!



If Exxon-Mobil (which I don't buy from anyway because they sell crappy gas) can't sell their regular for $1.0695/gallon plus distribution costs plus taxes at the pumps, they'll sell it to BP or Shell on the Nymex.

To echo the above post, I haven't been to an Exxon station except for an emergency since years before the Exxon Valdez mess. If they missed my business they sure didn't say anything.

1.2 billion people in China and a billion people in India buying Honda Accords and mopeds are going to have more of a long-term effect on the price of gasoline than if everyone in the US bought a Humvee. Since SUVs are a pretty hot item even in Europe with $5 (mostly taxes) gasoline the price is going to have to go up a lot before it puts any sort of a dent in SUV sales. That e-mail spam is a complete waste of time. Just IMO, etc. and worth.

dom

0.77 cents a litre on average. 0.87 for premium and 0.89 for Sunoco 94. However on Monday gas has generally been 7 or 8 cents less. At about 0.69 cents.

Coversion

1 US Gallon = 3.7854 Litres

0.77 cents X 3.7854 = $2.91 per Gallon CANADIAN !!! for regular.

0.87 cents x 3.7854 = $3.29 per Gallon CANADIAN !!! for premium.

Now convert $2.91 to US Dollars = $2.20 US

$3.29 to US Dollars = $2.49 US

So we're paying more, much more it seems and we have oil.

dabuda

wow, and i thought FL prices were starting to rise...it's about $1.71 p/gallon here for prem at sam's club or costco...dont know if they get their gas from exxon or mobil?

ClutchPerformer

I bet folks in Europe would LOVE to pay the equivalent of $2.30 for a gallon of gas. It's really not that expensive, guys.

CGTSX2004

iTrader: (1)

True that it's not that expensive, but what bothers me is that they made an initial raise in gas prices BEFORE OPEC made an announcement that they were going to cut production this year by several million barrels. The petroleum refineries pretty much cooked up the initial raise and are not using the production cut as an excuse to further raise our gas prices. I have no problem paying more for gas if the reason is legit, but if it's just because some executives thought their pocketbooks were looking kinda thin, that's a little irritating. Without that hike in prices prior to the OPEC announcement, we'd be down another 10 cents or so per gallon.

Plus, California is considering another 5 cent gas tax increase. Currently, we have some of the highest gas prices in the country and they still want to raise our prices even more. As I saw this morning, several places were up to $2.209/gallon for regular and nearly $2.509/gallon for premium. They're really trying for this $3.00/gallon by the summer thing.

jlukja

One of the reasons being given for the jump in gas prices here in California, according to the LA Times, is the switch to summer formula (less polluting = more expensive to produce). I would almost believe that except for the fact that the last time the prices jumped last fall it was because of the switch to the winter formumla. Its all BS and the real reason is PROFIT.

majormojo

Good numbers, Domn. Here in AB I'm paying about 68.4 for regular, about 78.4 for premium. I think that taxes make up about 30-some cents of each litre of fuel. (Which incidentally, I don't really mind because all those royalties on Alberta oil mean no sales tax here ) Some pumps have a little sticker that shows the breakdown for tax, fuel, transport, profit, etc. I'll have to have a look for one next fillup.

One other thing to keep in mind when comparing to US gas prices is that gasoline is sold volume-corrected to 15 degrees C here, so you're always purchasing the same energy potential per dollar. Most gasoline sales in the USA are not volume corrected, so the actual amount (mass) of fuel per gallon will vary with the temperature. A "gallon" of fuel in AZ is not the same as a "gallon" of fuel in MN at this time of year.

And that's the nit I'm picking today...

gogozy

gas price? i know they are drivers less price sensitive otherwise the full services will not make sense.... and, i somewaht believe gas price are result of demand....

as more and more cars being purchased in China, the demand for gas will increase, China account for 1/5 of world population; so their surge of demand will definitely result in higher price even if the OPEC did not cut production. how much is the gold now? remember years ago when federal reserve in Europe dumped gold on the market and no one believe in value of gold anymore? well, it way up now!!! it will keep going up, because as poor Chinese get wealther, they will buy gold.... so, mm, on second thought, gas price may still go up if we don't buy SUV...

but the best way to protect ourself is consume less gas!!! Toronto used to have cheaper gas compare to south east asia nations, but not anymore....... even with strong CDN, price still going up.....

Gpump

Several other possible ways to get their attention:
1) carpool 3 to a car for a month or so - they should notice that if enough people do it.
2) Get a more efficient car - ECHO and Prius sux in my opinion but gets better mileage (notice I didn't say it was more ecologically friendly b4 someone comes at me with the battery issue).
3) Get a VW TDI Jetta - gets 55 mpg on diesel which isn't necessarily cheaper to buy, but apparently cheaper to make.
4) public transportation

Of course, none of this matters unless you can mobilize a million or so people so I don't see any of it happening soon - when it gets expensive enough to start infringing on people's travel choices then something will happen - of course by that time we'll prolly think $3.00/gallon is f'ing great.

majormojo

The ultimate weapon for combatting Big Oil:

Crazytree

FALSE ARGUMENT #2: BOTTLED WATER

Well if they had to take every 20oz of gasoline and put it into a plastic container with a label and then package the containers together to ship to stores... well you get the idea. Btw do you spend more money on gasoline every year or bottled water?

FALSE ARGUMENT #3: CHINA

China will never see the level of development as a G7 country. It is economically unsustainable. In fact if you even want to get that far into the argument... the international steel industry would not be able to supply enough steel to auto manufacturers to supply a car to every household in China or India. People like Bob Shiftright may also be hard pressed to explain how "a billion people in India" are going to afford cars considering the per capita GDP is about $2,600 anually.

majormojo

Well, he didn't say they'd be nice cars. Some of my best winter beaters over the years have been $200 or less...

------
Note to self: investigate business opportunity shipping used Yugos to China.

kiteboy

Ok, that would get their attention. They'll love you because you just increased their profit margins by buying diesel...

kiteboy

Given the many fuel consumption threads and the fact that we are enthusiasts of a sedan with a reasonably small and fuel efficient engine, can I make the leap of faith that many here are not fans of gas-guzzling SUV's?

If so, then lowering gas prices would encourage and enable people to buy more SUV's. We should be arguing for higher prices to discourage that sort of behaviour.

Crazytree

too bad I've spent more on gas in eight months than most Indians make all year.

majormojo

Yeah, too bad. That leadfoot must be a bitch, fersure. Bet it don't hurt like Dan Martin's foot tho'.

Gpump

Depends on what the profit margin is - considering we usually get about 30 mpg, unless the profit margin for diesel is 2 times what it is for premium unleaded (which I doubt but do not know) then it would cost them if we used more fuel efficient diesel passenger cars. Diesel is supposed to be cheaper to refine/produce, but I don't have numbers to go on, only suspicion - if you have hard numbers, please lemme know - I almost got TDI Jetta, would be useful to know for future reference.

Jason

Here's an update:

Origins: Ah, springtime!
The season for a number of important renewing rituals: housecleaning, the beginning of baseball season, balancing eggs on their ends, and the forwarding of outraged e-mails calling for oil company boycotts.

This year's litany is the usual one: Gasoline prices in the USA are too high; gasoline is a unique commodity whose price isn't subject to the usual market forces of supply and demand; OPEC and greedy American oil companies have deluded us into believing that current gasoline prices are actually comparatively cheap while they secretly manipulate the market to keep prices artificially high; and a simple boycott of a couple of brands of gasoline will rectify all this. (It's amusing that calls for "gas outs" predictably occur every spring, just when gasoline prices start to rise with the increased demand that accompanies the better driving weather of spring. Why don't those evil oil companies, who can apparently control the market at will, conspire to jack up their prices during winter, when prices bottom out?)

It is true that the gasoline market in California is particularly volatile, generally resulting in higher prices there than throghout the rest of the USA, because:


California is the second-biggest gasoline market in the world, outranked only by the United States as a whole. (California alone consumes as much gasoline as all of Japan.)

All of the state's refineries, running at full capacity, cannot meet California's one million barrels per day consumption, requiring the importation of more expensive product to meet consumer demand.

Since 1996, California has required a cleaner-burning formulation of gasoline which is produced at few refineries outside of California.

The four largest oil refiners in California produce almost 80% of the gasoline supply, and the six largest refiners operate about 85% of the retail gasoline outlets.
All of this makes California particularly susceptible to price increases whenever the gasoline supply is disrupted due to factors such as crude oil production cuts by OPEC nations or problems that temporarily shut down refineries. In fact, however, gasoline prices will probably be lower this summer than they were in 2001 and 2000, and they'd likely be even lower if it were not for a couple of disruptions to the supply of crude oil: Iraq's cutting their oil exports (to protest Israel's military actions in the West Bank) and political unrest in Venezuela (one of the largest exporters of oil to the USA).

Oil companies can manipulate their prices somewhat by controlling how much gasoline they produce and where they sell it, but they can't alter the basics of supply and demand: prices go up when people buy more of a good, and they go down when people buy less of a good. The "gas out" schemes that propose simply shunning one or two specific brands of gasoline won't work, however, because it's based on the misconception that an oil company's only outlet for gasoline is its own branded service stations. That isn't the case -- gasoline is a fungible commodity, so if one oil company's product isn't being bought up in one particular market or outlet, it will simply sell its output to other companies:


Economics Prof. Pat Welch of St. Louis University says any boycott of "bad guy" gasoline in favor of "good guy" brands would have some unintended (and unhappy) results.
. . . Welch says the law of supply and demand is set in stone. "To meet the sudden demand," he says, "the good guys would have to buy gasoline wholesale from the bad guys, who are suddenly stuck with unwanted gasoline."

So motorists would end up . . . paying more for it, because they'd be buying it at fewer stations.

And yes, oil companies do buy and sell from one another. Mike Right of AAA Missouri says, "If a company has a station that can be served more economically by a competitor's refinery, they'll do it."

Right adds, "In some cases, gasoline retailers have no refinery at all. Some convenience-store chains sell a lot of gasoline -- and buy it all from somebody else's refinery."

A boycott of a couple of brands wouldn't result in lower overall prices: Prices at all the non-boycotted outlets would rise due to the temporarily limited supply and increased demand, making the original prices look cheap by comparison. The shunned outlets could then make a killing by offering gasoline at its "normal" (i.e., pre-boycott) price or by selling off their output to the non-boycotted companies, who will need the extra supply to meet demand. The only person who really gets hurt in this proposed scheme is the service station operator, who has almost no control over the price of gasoline.
The only practical way of reducing gasoline prices is through the straightforward means of buying less gasoline, not through a simple and painless scheme of just shifting where we buy it. The inconvenience of driving less is a hardship too many people apparently aren't willing to endure, however.

Last updated: 1 March 2004

CGTSX2004

iTrader: (1)

Sounds to me like another simple case of supply and demand. If we cut the demand, the extra supply will reduce the price. Funny how simple some things can be broken down to.

Jason

Exactly. The only way to reduce gas prices is to stop buying SUVs. Hybrids and alternatives are the ticket to lower gas prices. I still want an answer as to why we haven't developed solar power yet.

CGTSX2004

iTrader: (1)

Americans are too into the whole "don't tread on my freedom to do (insert stupid thing such as buy a completely useless SUV just for the looks)." Excess has become the American way and SUVs are not going to go away anytime soon. Better idea might be to stop exempting SUVs from the federal fuel economy requirements and force the auto makers to develop SUVs that are more fuel efficient.

gonova

The only way to effect a real change is to raise the CAFE standards substantially, say 30% over 5 years. If the car makers don't have an economic incentive (read: fines) to make more fuel-efficient vehicles, they won't do it. Won't happen as long as GWB is in office.

captainjack

My favorite part:
"If it goes one level further, you guessed it..... THREE HUNDRED MILLION PEOPLE!!!"
That's about the ENTIRE U.S. population.

Crazytree

You're overlooking the fact that a large proportion of fuel is used by aircraft and transport/logistics companies who are critical to the economy and are not going to be reducing their gas consumption for a VERY long time.

CGTSX2004

iTrader: (1)

This is true. However, many of those companies do not worry too much when gas prices increase because they pass that cost on to their clients.

For day to day transportation, reducing the amount of fuel purchased directly from gas stations, especially with the amount of money Americans spend on gas, could be fairly substantial. As of this morning, even the OPEC nations have realized that if this price increase sustains, things may spiral out of control so they've hinted at a production increase in the next few weeks to bring gas prices under control.

Crazytree

While this is true for some airlines who have assessed fuel surcharges... it is not true for major shippers like UPS or FedEX who have to eat the costs.

But then again passing the costs along to the consumer is the end result of all of this... and exactly what we are seeking to avoid.