Gas Boycott


I read an article from MSNBC today about a proposed “gas boycott” on May 15. The organizers want people to refrain from buying gas on that day to “stick it to Big Oil” — they think that if enough people don’t buy gas that day, the oil companies will lose millions and will be forced to reduce gas prices. Yeah, right.

The article explains why a “gas boycott” will will have exactly no impact on long-term gas prices. I’ve been saying this for years; I even had a letter to the editor published in the local paper a few years ago when one of their columnists suggested it. I didn’t do all the math that the author of the article did, but it seemed obvious to me that it was hogwash. First off, if you didn’t need gas on the 15th anyway, then your refusal to buy gas that day is meaningless, so only the participation of those who would have filled up that day will have any effect. For those who do need gas on the 15th, refusing to buy gas that day just means that you’d fill up on the 14th or the 16th instead, so the total revenue of the gas companies would be even over that three day period. Gas prices would fall on the 15th, but would come back up again on the 16th as demand returned to normal — they might even go higher.

The only way to permanently reduce gas prices is to permanently reduce demand for gas, which means permanently reducing consumption. Making gas guzzlers more expensive and hybrids cheaper would be a good step — when I bought my Sunfire a couple of years ago, I would love to have bought a hybrid, but even given the lower gas costs over the life of the car, I couldn’t afford the initial cost. My Sunfire was about $21,000 including all taxes and fees and such; hybrids started around $32-35,000 (they might be a little cheaper now, but I don’t think they’ve come down all that much). If you assume that the car uses $40 of gas per week, and the hybrid uses half, or $20 a week, then it would take eleven years before the cheaper gas offsets the $11,000 extra cost. Now, I don’t know exactly what kind of mileage a hybrid gets compared to a standard car (is it half? More? Less?), but until the prices come down significantly, or I get a big bonus at work, I won’t be looking hybrid.

Aside: I know this is an unfair comparison because my car is pretty cheap, and they don’t make hybrid Sunfires, so I’d have to upgrade to a Camry or something like that, which is more expensive to begin with. I’m comparing apples to oranges, but the fact remains that I would like to have bought a hybrid but couldn’t afford one.

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