WINNABLE Gas War

HA HA.

You are really stupid if you think this will work. If Americans refused to by from ExxonMobil (it is one company, not two), then the other companies will increase their prices because of the increased demand. Those Americans, like me, who will continue to buy from ExxonMobil, will then benefit, because ExxonMobil will have lower gas prices.

Are you really a big enough bunghole to really think that Americans will stop buying from ExxonMobil until gas prices go down to $1.30?

If the scheme had any effect, the only thing it would do is hurt the honest Americans who are independent retailers of ExxonMobil products.

Jeff

OLD OLD news. It didn't work last time either. Please note what Economics Prof. Pat Welch of St. Louis University has to say about this plan.

Here's what

has to say about it:

*Origins:* This year's litany of complaints about gasoline prices is a re-run of the same program from years past: 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 secretly manipulate the market to keep prices artificially high; and a simple boycott of a couple of brands of gasoline will rectify all this.

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 down when people buy less of a good, prices go up when people buy more of a good, and prices go _way_ up when demand outstrips available supply. The "gas out" schemes that propose to alter the demand side of the equation by shunning one or two specific brands of gasoline for a while won't work, however, because they're 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 (or through) other outlets: 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 of gasoline won'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.

So, if it's supply and demand, why aren't there gas stations running dry and lineups etc. There's enough supply out there, although more refineries couldn't hurt, so artificial shortages can't be manipulated into the pricing. The real cause of the high prices is the high price of oil, and the price of oil is artifically high thanks to commodity markets and their future oil prices -- it wouldn't surprise me if the oil companies are bidding the price up. When the price of oil goes up the oil companies make MORE profit than when the price is lower, so it's a WIN-WIN for the oil companies, and a LOSE-LOSE for us buyers. OPEC was happy with $25 oil, then the futures market over reacted and drove the price sky high. The futures market is like day traders, they just suck the life out of the commodity they're buying.

You are an idiot. The price of oil goes up and up and up because as it becomes harder and harder to find and extract, we use more and more and more. And so do the Chinese and Indians (their auto markets are expanding very rapidly, as are their economies).

No, you've been brain washed. The Chineese and Indian markets will affect oil supply someday, but not today my friend. When was the last time any gas station you went to didn't have all the gasoline you wanted?

How much oil are the Chinese and Indians using today? How much ten years ago?

BTW, they won't affect supply that much. They do affect demand.

The supply is there, but the demand is growing real fast.

Jeff

[...]

Friday. But it was full again Saturday, with higher prices. (:

Back when the government under Carter tried to regulate the supply. The gas became available when Reagan stopped regulating the supply and allowed the market to set the price. Economics 101 ;)

mike

Here in Canada, most gasoline suppliers share refinery capacity.... If company "A" doesn't have a refinery that can supply a particular area they will trade with another supplier that may not have specific capacity in another region.

Now, a refinery must meet a certain portion of their total production capacity to break even..... if they exceed that, they start making more profit. Sharing refinery capacity is one way that these companies have of ensuring that they are operating in the black.

If you purchase Husky branded gas in northern Alberta... you may be buyiung gasolione produced at one of three facilities.... I could come from the Husky refinery near Calgary.... or it may come from Esso in Edmonton or Esso in Taylor, B.C. The gasoline is blended to "meet or exceed" the Husky Oil formula.

We are delusional if we believe that anything less than government intervention is going to fix this situation.....

OTOH, we could all start walking, riding bicycles or horses or even using public transportation where available to reduce our dependency on big oil....