The Bee County (Texas) Commissioners voted on Monday 4-1 to urge people to stop buying from Exxon Mobil until the price of gas drops down to $1.30 a gallon.
I’m just floored. I understand people’s frustration at high gas prices and the fact that they want to do something about it. But this is just ridiculous.
Haven’t these people been following the news lately. Don’t they realize that the price of oil is up all over the world and that Exxon Mobil doesn’t have any control over that price? Don’t they have the slightest inkling that no one can afford to make gas for $1.30 a gallon, since almost half the cost of a gallon of gas comes from the price of crude oil? (Source) Not to mention the fact that Texas has a 20 cent per gallon gas tax, that means that they want it sold for $1.10. Add in refining costs, distribution and other costs, they are, essentially, asking ExxonMobil to provide gas for well under a dollar a gallon.
Now, I’m no economist. But I know enough to know that you can’t force someone to sell something at below cost! Are these elected officials so economically illiterate that they don’t see a dumb proposal?
One of my favorite lines from the article was this:
Well, considering that gasoline makes up two-thirds of their sales (see article), if you can’t see how boycotting 2/3 of someone’s buisness (for factors that are beyond their control anyway), then you seriously need to install some brain cells.
Zev Steinhardt
(Note: I’m aware that there have been emails circulating for years asking for gas to return to $1.30. This, however, is not an urban legend.)
I agree with everything you’ve said but this. Gas stations don’t make a profit on the actual gas. They make their profit on snacks and overpriced groceries etc (if it’s a convenience mart) or auto repair (if it’s one of that dying breed: the gas and service station*).
my first job ever was working at one of these. People were consistently amazed at our pitiful junk food selection. They usually stared confusedly if you said that we could take care of any car problem (minus body work) that you had, though.
The funniest part of all this is that everyone is being urged to drive with their lights on to show their displeasure with the oil companies. They must be laughing their asses off over that bit of stupidity.
Anyone else find it weird how every summer, a bump in the price of gas turns American politicians into hard-core Marxist Commisars? It’s a free market, deal with it.
It’s free speech: deal with it. Boycotts rarely work, and this is a particularly stupid call for a boycott, but the concept of a boycott is not unsound nor a violation of “free market” concepts.
The grasp of economics some people have is truely pitiful.
Boycotting one gas company will not drop prices. Even if you could get a significant amount of people to join (easier said than done, but let’s play along), you’re simply shifting the demand to the remaining gas companies. In response, they’ll raise their prices.
And, if ExxonMobil lowers their prices, even only a little bit (like from $3 a gal to $2.75 a gal), people will break the boycott. Then the other companies will lower their prices, but Exxon will be free to raise theirs again. Once they’ve equalized, they’ll be free to raise up together.
Now, if, as a consumer, you want to lower gas prices, stop using gas. At all. From every source. Walk, bike, take mass transport, or if you absolute must, arrange to carpool with as few cars as possible. That will stop demand. That will lower prices. But, here’s the tricky part, once prices drop, we can’t start using gas again, or prices will just rise right back up again and we’ll be right back where we’ve started.
Then why have most gas stations installed pay-at-the-pump feature? If they don’t make money on gas, then that seems like an absolutely certain way to make sure that handly anyone comes into the store to buy potato chips.
