Boycott Exxon

The cry goes up around the country in break rooms and email in boxes everywhere ... boycott Exxon and they'll be forced to lower their prices and that will make the other stations lower their prices to stay competitive. Sounds great, let's everybody jump on the bandwagon and start buying our gas someplace else. I mean they'll have to lower their gas prices right?

WRONG.

First off ... you would have to get a large % of gas purchasers who currently use Exxon to stop using them for a couple months for them to even notice that's not a likely situation to start with, but let's say you manage to get over 50% of their regular customers to switch to other brands ... that will lower prices, right?

Wrong again. But why not you ask ... simple economics. If you're buying gas somewhere else you're increasing demand for their product ... so Exxon's demand falls by 50% demand across the board is unchanged and other stations see an increase in market share ... they have higher demand and therefore no motivation to lower prices ... in fact if the demand increased substantially they're more likely to INCREASE their price, not lower it ... as a result Exxon has no strong motivation to lower the price and even if they do lower it slightly to try to pick up a bit in sales, unless people come back (driving their demand up and thus making it more likely that they'll just bring their price back in line with other retailers, not the other way around.) there's no motivation for the other retailers to match the drop.

The other thing is ... the only people you're going to hurt at all with this is the local retailer ... not Exxon. Exxon will just sell their gas unbranded to non-affiliated stores, just as they do currently. The Exxon retailers ... who have already PAID for the gas in the tanks (and have to be able to afford to fill the tanks again) are the only ones that are going to potentially take a loss in the situation.

If you want to lower gas prices ... boycotting any SINGLE oil company won't work ... you will have to lower consumption (and thus demand) DRASTICALLY across the board to all companies. And when you're talking about lowering consumption you're going to have to get the big fleets to do it, not just Joe Average American. You're also going to have to get people to use less heating oil and/or any other oil product that is refined from crude oil ... and to cause any drastic change in the cost of gas you're really going to need to do this all on a global scale.

If you want to do it faster ... get Congress and Local and State governments to repeal the various taxes rolled into the costs. Exxon, for example, paid more last year in taxes than it made in profits .... yes that'd right, the government made more off of Exxon's gas than Exxon did. (I've seen the exact numbers for that, but I can't find them at the moment ... if I do find them I'll add them as an edit to the article later.)

Add to that the cost of compliance with various governmental regulations (all of which gets passed on to the consumer) and all of the various different blends required by different states meaning that they have to split production and try to match their demand as closely as possible running 10 or so different batches ... increasing their production costs through waste if nothing else.

Which brings me to the California nutcases that are trying to further increase their fuel and automotive standards even further beyond the current federal regulations (increasing production costs further) ... personally I think that fuel and automotive manufacturers should give California the one finger salute and say 'if you want to require that fine ... we just won't sell in California' ... see how Cali likes not having gas for their cars ... or any new cars for that matter.....

Anyway ... I've got work and writting to get back to ... until my next ramble ... be alert! The world needs more lerts. (nope, not original ... but hey that's life. :p)