In the past week I have gotten the same email from a high school friend and now from a co-worker. It proposes a new plan to bring gas prices down that will REALLY WORK (capitalization always helps serious policy proposals).
The only problem is that, just like not buying gas on one certain day, this new proposal will have absolutely zero positive impact on the price you pay at the pump.
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.
Well at least we agree on one thing – the “don’t buy gas on a certain day” campaign did not make any sense and was a rather silly idea.
BUT, whoever thought of this idea, has come up with a plan that can really work. Please read on and join with us! By now you’re probably thinking gasoline priced at about $1.50 is super cheap. Me too! It is currently $2.79 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.
Okay for starters buyers do not control the marketplace, neither do sellers. It is a joint control through the concept of supply and demand that anyone should learn in ECON 101. As of now the email has made huge claims of gigantic impact without offering much in the way of details.
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.
This is, of course, just as silly as the previous campaign. So are we all going to the local Citgo station to support the dictator thug Hugo Chavez?
The email creator and those passing it along don’t understand numerous things about the economy and what sets gas prices.
First, if you stop buying from Exxon, but you still buy the same amount of gas from BP nothing will change on the demand side of the equation, it may even get worse. If suddenly BP, Citgo and others are flooded with all of Exxon’s former patrons they will not have enough gas to support the new costumers – increasing the demand for their product and driving the price even higher.
Secondly, Exxon does not set the price by itself. They cannot simply lower the price to $1.50 because no one is buying their gasoline. They have to sell it for at least what they put into it. Right now, you probably couldn’t get $1.50 gas, if you bought the crude oil and refined it yourself. A barrel of oil is $70 right now, too high for gas regardless of the oil companies for gas to drop to the old pricing levels.
Thirdly, if the campaign worked as effectively as possible the only outcome would be the collapse of an American oil company. This would further remove competition from the market, decrease the number of companies drilling for oil and, once again, drive the price up even higher.
The email goes on and describes how “300 MILLION people could conceivably be contacted within the next 8 days!!!” Yeah, in just over a week we can drive gas prices higher! Hurray, we have the power!
Acting together we can make a difference. If this makes sense to you, please pass this message on. I suggest that we not buy from EXXON/MOBIL UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN. THIS CAN REALLY WORK.
I have a better idea and here it is:
This silly “solution” did not make sense to me and I did not pass it on. Instead I choose to refute it. If you feel the same way, email this post to 10 people. We could make 300 MILLION people less ignorant in 8 DAYS!!!! Let’s stop the spread of CONFUSION and keep our gas prices as LOW AS POSSIBLE. Keep sending this post to EVERYONE who sends you THIS EMAIL PLAN. THIS CAN REALLY WORK!!! (Plus it would give us crazy high traffic, but that is merely a side benefit to informing America.)