1-day gas boycott won't make prices fall, analyst says
Last Updated: Tuesday, May 15, 2007 | 4:13 PM ET
Consumers frustrated with the cost of gas have launched an online campaign urging others to boycott gas stations on Tuesday, a movement that analysts say will not likely force prices to drop.
An e-mail circulating in Canada and the U.S. urges consumers to hold off topping up their fuel on May 15 in an effort to force oil companies to lower their prices. According to the website snopes.com, which explores urban legends, the first boycott was organized in 1999 with several others rolling out since then.
The national average for a litre of gasoline in Canada has reached $1.149, according to the gas monitoring website gasbuddy.com.
But industry observers say a one-day boycott is largely ineffective, as consumers who participate will either fill up the day before or the day after.
"It has no impact on gasoline prices whatsoever, that's the bottom line," said analyst Catherine Hay, a senior associate at MJ Ervin & Associates. "What's driving gasoline prices is not consumers' opinion about them — it's the imbalance between supply and demand for gasoline."
Hay said that consumers who want to bring down prices could take action by simply driving less and buying less gasoline — not just for one day but over a longer timeframe.
"The prices that we're seeing are being driven by high demand and very tight gasoline supplies," she said. "Consumers can't impact the production of gasoline so they can't impact the supply side, but they can impact the demand side."
Earlier this month, the Consumers' Association of Canada called on the federal government to investigate rising gasoline prices.
Bruce Cran, president of the association, said motorists need to be protected, noting that they were frustrated with industry explanations of low supply, high demand and refinery problems.
The Competition Bureau has investigated allegations of price collusion several times but found no evidence of wrongdoing.
Amazing. I can't believe people are this stupid to waste time on communicating something like a one-day 'boycott' when they should really be focusing their efforts on something more sustainable and effective over the long-term like reducing their own energy use. This type of behavior makes no difference whatsoever. It might make some people feel like they're making a difference today, until they go to fill up tomorrow and realize that the prices are the same as they were yesterday. Don't people read? Don't they understand the fundamentals of what is going on? Everytime the prices go up, people freak out and demand public investigations into price manipulation or withholding of inventories, like it's all a big conspiracy by the oil companies. Does this make them feel better that they're wasting public money to come to zero conclusions everytime they do this? Don't they see the pattern here? Do these people even know that oil companies are run about as well as any other company? They go from one crisis to another like anyone else, especially during boom times. Oil companies are fortunate their profit margins are as big as they are with the amount of waste that goes on internally.
We've become so used to having cheap and plentiful energy for so long (if you consider 60 years a long time) that the reality of the current situation is unconscionable.
Demand outstripping supply? However did that happen?
I fear that even if things get worse, some people will cling onto status quo so strongly despite clear signs that they must adapt. It's going to be adapt or perish very soon.
Oh yeah - and in other news - JERRY FALWELL IS DEAD! I hope he's enjoying his own slow-roasting on a spit.