Why A One Day Gas Boycott Wont Lower Gas Prices

by Khaleef Crumbley on March 11, 2011

in Economics

Gas Boycott

For more than a decade now, people have used the internet to spread the idea of staging a gas boycott in order to lower gas prices. Every time I get one of these emails, I cringe at the thought that people really expect this to work!

[Here are some great tips for how to save money on gas, and save money on car costs]

As you may have noticed, gas prices have recently increased by large amounts, very quickly. Because of this, I have actually been on the lookout for this type of email for the last few weeks.

Gas Boycott On Facebook

I have to admit that I was a little disappointed when I didn’t receive a flurry of “don’t buy gas on this date” emails in my inbox recently. But then I received an invitation on Facebook for an event entitled, “DON’T PUMP GAS ON MARCH 11TH 2011 “GAS OUT” DAY”! Here is the description of this event:

Don’t pump gas on March 11, 2011. .In April 1997, there was a “gas out” conducted nationwide in protest of gas prices. Gasoline prices dropped 30 cents a gallon overnight. On May 15th 2007, all internet users are to not go to a gas station in protest of high gas prices. Gas is now over $3.50 a gallon in most places. There are 73,000,000+ American members currently on the internet network and the average car takes about 30 to 50 dollars to fill up.

If all users did not go to the pump on the 11th, it would take $2,292,000,000.00 (that’s almost 3 BILLION) out of the oil company’s pockets for just one day, so please do not go to the gas station on March 11th and lets try to put a dent in the Middle Eastern oil industry for at least one day.

If you agree (which I can’t see why you wouldn’t) resend this to all your contact list. With it saying, ”Don’t pump gas on March 11″

As I write this, there are over 16,000 [edit: there are now over 19,000] people confirmed for this “event”! That might not seem like a lot, but just think about how many people probably started their own similar events to get the word out!

I remember when I was younger, people always talked about staging boycotts of local gas stations that had high prices. Then as time moved on, consumers used mass emails to build support for these events. I have even received text messages in the past urging me to avoid purchasing gas on a particular day.

So I guess using Facebook (and probably Twitter) is just the next step in our futile attempt to lower gas prices!

Why A One Day Gas Boycott Wont Work!

Well, before I address the economic fallacy of a one day gas boycott, I wanted to see if there really was a significant drop in gas prices during April, 1997. According to an article on MSNBC, there wasn’t one:

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.

So now that that’s out the way, we can get down to why holding a “gas out” won’t work.

The idea of a boycott is where you don’t buy a particular item, or from a particular store until the change that you are seeking has been made! You are showing the company that you are so serious about your demands, that you are willing to go without their product until they change! However, in these gas boycotts, all you are doing is avoiding buying gas on a particular day.

Think about it: You have to fill up your tank whenever it gets empty (unless you find an alternative to driving), so if you need to fill it up near the day of the protest, you only have two options. You will either fill it up the day before, or the day after!

All you are doing is pulling forward demand, or in some cases pushing it back! This is a fancy term that economists use to describe the phenomenon when demand for an item or service is shifted into a different period. Usually, this happens when something is done to artificially increase demand for a period (think cash for clunkers, or the homebuyer tax credit) – the influx of customers are just people who planned to make purchases at later dates.

The problem with pulling forward demand is that there isn’t actually a change in demand over a given period of time.

For instance, if you reduce an oil company’s revenue on a particular day by $2 billion, all that will happen is that their revenue will increase by $1 billion on both the day before and the day after – because you can’t go without filling your tank!

So, at the end of the week/month, the oil companies will see no change in revenue whatsoever! It doesn’t matter if it’s a small corporation, or large companies rated AAA, a “gasout” won’t work! You are better off using your credit card benefits to earn some cash back on your gas purchases!

photo by bitzcelt

Reader Questions

  1. Have you ever participated in a gas boycott?
  2. Why do you think this idea keeps coming up even though it doesn’t work?
  3. What steps, if any, have to taken to lower your fuel costs?

© 2011 – 2012, Khaleef Crumbley. All rights reserved.

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{ 7 comments… read them below or add one }

1 fedup

A one day boycott is just silly, lets maybe try to not buy gas at all from just one of the large oil companies until they have no choice but to lower their inflated prices. lets start with chevron. this will work.

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2 Sandy @ yesiamcheap

I always think that these e-mail(s) are stupid. People do not understand that defraying a purchase by a day effectively does nothing since gas is ordered monthly. Who it does affect are the gas station owners that might lose revenue from the attached stores where they sell candy and other sundries.

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3 Amanda L Grossman

Thanks for the link! I will be including in the Gas Roundup.

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4 Dr Dean

I agree completely with your assessment of one day boycotts.

If you want to save money on gas, walk, bike, or use public transportation.

I don’t believe the oil companies are the root of all evil here. We may need to cut any continuing subsidies or corporate welfare, but otherwise they only are charging what the market will bear.

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5 Charles @ CreditDonkey

Khaleef,

This might not be a popular opinion, but is low gas price a good thing in the long run? Should we consider raising the gasoline tax (and possibly lowering taxes elsewhere)?

A higher gasoline tax can help pay for infrastructure improvements and encourage improving gas mileage or changing behavior.

A drawback of higher fuel prices in the short term is higher food prices since the average item @ the supermarket traveled over 1500 miles to get to your dinner table. As we have witness recently, higher food prices also leads to political instability.

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6 Ken @ Spruce Up Your Finances

I usually receive something in the e-mail about participating on this one day gas boycott. But the gas companies are probably laughing because all the boycotters are doing is just deferring the expense. Gas companies know that even if you boycott that day, you’ll end up buying at a different day so the revenues are just deferred.

The way to boycott them is to really learn how to conserve gas by finding alternative ways of transportation such as taking public, riding a bike (if it’s reasonably close) carpooling, van pooling or proposing alternative schedule to your employer. In addition, purchasing alternative-fuel vehicles wouldn’t hurt either

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7 Tristan

How is it a boycott, I don’t consider one day from gas a boycott…for the amout of people in world and the tiny fraction taking only ONE DAY from gas is not going to effect anything. Nothing. Zip. Nadda. Whoever thought it would needs some more education. Especially when the oil itself is used for most of the energy anyway, even though they’re not buying gas they’re still using up oil in some way.

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