Why one-day gasoline 'boycott' won't work
E-mails calling for May 15 service station drive-by will have zero impact
By John W. Schoen
Senior Producer
MSNBC
With gasoline prices topping $3 a gallon again, a number of readers, including Greg in Louisiana, are wondering about a proposed one-day "gas boycott" that has a goal of taking $2.3 billion in oil company profits. Aside from circulating some questionable math, organizers of this event stand exactly zero chance of having an impact on gas prices.
Rumor has it a gas boycott will be in effect on May 15, 2007. Have you heard of this? ... The e-mail stated, "Do not buy gas on May 15. In April 1997, there was a 'gas out' conducted nationwide in protest of gas prices. Gasoline dropped 30 cents a gallon overnight. … There are 73,000,000-plus Americans currently on the Internet network, and the average car takes about $30 to $50 to fill up. If all users did not go to the pump on the 15th, it would take $2,292,000,000 out of the rich oil company’s pockets for just one day. So please do not go to the gas station on May 15, and let’s try to put a dent in the Middle Eastern oil industry for at least one day."
—Greg M., Lake Charles, La.
Spring seems to be a time of year that brings out irrational behavior in many of us. Congress talks about balancing the budget. Chicago Cubs fans revive hopes of winning the World Series. And American drivers who are passionate about pump prices begin organizing a gasoline “boycott” aimed at “sticking it to Big Oil.”
Unfortunately, even if this boycott were to live up to the hopes of its organizers — including everyone who has forwarded this e-mail in the past few weeks (you know who you are) — it would have zero impact. None whatsoever. But before we get to the reasons why, let’s do a little fact checking.
Let's start with the price impact of that alleged “gas out.” In the first week of April 1997, the average price of a gallon of gasoline nationwide was $1.248. By the end of the month, the weekly average was $1.24. If there was a one-day drop of 30 cents a gallon, it doesn’t show up in the
statistics compiled by the Department of Energy. (We realize that many readers who are passionate about pump prices believe that this government agency is just a shill for the oil industry, ready to cover up what’s “really going on.” But humor us just this once.)
Some of the other numbers in this widely circulated mail don't add up either. There are more like 200 million-plus Web users in the U.S., not 73 million. And the $2.3 billion daily revenue figure assumes everyone fills their tank every day, which they don't.
But even if these numbers were correct, it wouldn't matter.
The real problem with this idea is that — as some versions of this e-mail helpfully suggest —these "boycotters" simply top off their tanks May 14 or wait to fill them up May 16. All that does is shift sales from one day to another. Any money “lost” from lower gasoline sales on May 15 will be made up with higher sales on the days before and after the “boycott.”
To have a real financial impact, you’d have to figure out how to get people to keep their cars off the road for the whole day — cutting actual consumption. Of course, you’d also have to shut down ambulance services, police cars, fire trucks, delivery vans, etc. And don’t forget all those other gas-powered devices: Every landscaping crew would have to take a holiday on one of the busiest days of the year.
But suppose that, through some magical force of nature, you managed to shut down every gasoline-powered vehicle and device for one day. Let’s look at how much money would be involved and what would happen to it:
Based on current demand of about 386 million gallons a day, at $3 a gallon, the total value of gasoline sold daily in the U.S. comes to almost $1.2 billion. But that’s the total retail value — the pot of money that’s divvied up along a chain of oil producers, pipeline operators, refiners, wholesalers, truckers and retailers. Let’s follow the chain and see who gets to keep what.
