I’m not the sharpest fellow when it comes to certain things, and that’s why I love this place.
Let’s pretend that everyone decided to boycott “X” company’s fuel for 30 days, would this result in lower prices?
Could it? Would it?
Is it just a silly idea that is nothing more than a waste of time?
It’s next to impossible to get people to “collectively” work together, so I know this is pure fantasy, but “if” it could happen, would such actions help reduce gas prices?
Pick on one for a while until they get the message, then move onto a different company.
I’m just curious as to what kind of effect this could have (if any)
Thanks
Gus “not so smart” Handsome
PS—> This isn’t meant as a debate about whether free market economics is right or wrong, I understand the prices are set by the market, but it’s more to find out if people could change prices by acting as a collective.
Boycotting Shell, for example, wouldn’t do a damn thing. Doesn’t matter if every person in the country did it, either. Shell would just sell its gasoline to all the other companies that are seeing increased sales because of the Shell boycott. It would accomplish absolutely nothing.
How would you know whose oil you’re using? If you decided, for example, to boycott the National Iranian Oil Company in protest of their government, how would you tell their oil from the oil sold by Qatar Petroleum or Kuwait Petroleum Corporation?
Yes, people could change prices by acting as a collective.
But not something like gas, and not through boycotting a single retailer.
Now, if everyone cut their consumption in half - the price would drop very quickly.
Boycotting a single retailer may drive down their price - temporarily. Once they drop their price to some level, you have to assume people will buy there again. In the meantime, the other retailers may have increased their price, as they face less competition.
If low pricing breaks the boycott, the consumers return, and their price goes back to market. Other retailers have to reduce their price to compete.
A basic assumption of free market theory is that consumers make rational decisions with the necessary information, such as buying the best gas value for their dollar.
Basing a boycott on a false assumption of overall price impact in the market (without cutting consumption) violates the free market, and can cause all kinds of unpredictable results. And our economy hates unpredictability.
Think producer>wholesaler>retailer>you. (I know, this is a greatly simplified version of the petroleum marketing system, but it’s enough for my purpose.)
What you’re talking about is boycotting the retailer. In that case, the wholesaler will simply make up the loss by selling to other retailers who aren’t being boycotted.
Let’s say that the wholesaler owns the retailer. In that case your boycott would hurt both parties, but the producer would simply sell to other wholesalers who aren’t affected. After all, you have to buy your petrol somewhere don’t you? And as long as you buy petrol from anyone, anywhere, a producer, wholesaler and retailer will continue to serve you.
The only way for your boycott to work is to boycott ALL the producers, i.e. stop buying the product entirely. And continue not to buy the product long enough for it to cause a blip in the sales figures.
This is pretty much the answer I was expecting.
AZCowboy, I agree that cutting demand would help to reduce prices, but that’s a tough sell.
I know for me, I always said the cost of gas won’t affect me, I’ll just pay whatever.
This isn’t working out quite like I thought.
My 4x4 F150 is costing me about $1.40 per liter x 95 liters = $133 per tank.
That gets me a whopping 300 miles.
At $700 per month just for fuel, I’m looking into buying a used 4 banger beater to help reduce my consumption.
I think the days of cheap gas are a thing of the past and using less is the only solution that will lead to meaningful results for the wallet.
Most gasoline retailers are not branches of the brand they sell. So, if you had a massive boycott of Papa Achmed gasoline, you might take a big bite out of your local PA dealer’s pocket. You wouldn’t hurt Papa Achmed a bit. Gasoline is delivered to stations by tanker trucks that don’t have any brand labels. When you go to a BP station instead, or a Bob’s Gas station, you might well be buying Papa Achmed gas. You can’t tell if the crude came out of a well in Oklahoma or in Iran, either.
Your local Papa Achmed dealer can easily switch signs and become a Wahoo Petro dealer, to escape the boycott. After the switch, he may still be selling Papa Achmed gas. How would you know?
Shell is not a very good example, because Shell actually succumbed to an international boycott in 1995. The company had decided to sink a decommissioned oil storage platform, the Brent Spar, in the North Atlantic. Greenpeace activists occupied Brent Spar, and the organization called for an international boycott, which actually made Shell dispose of the platform in a land-based Norwegian facility.
Of course it’s a different question whether it was actually the boycott which made Shell change its mind; it could well have been that the company thought this single buoy was not worth all the trouble and political pressure that came along with the debate. Surely, if there had been more at stake for the company (for example, if the objective of the campaign had been to attack Shell’s position as an international corporation in general), Shell would not have yielded to Greenpeace’s protests that easily.
There are numerous anti-Shell campaigns because of the company’s involvement in Nigeria and the human rights situation there (Wiki).
Thudlow Boink provided the Snopes link that quoted the AAA Missouri spokesman who said “If a company has a station that can be served more economically by a competitor’s refinery, they’ll do it.”
Around my area it doesn’t matter what the brand is. The gas pretty much comes from Western Refining. Not just the auto gas…they supply the stuff used for jets at the airport, too. It’s local and doesn’t carry the cost of being transported from hundreds of miles away.