There is an e-mail which is circulating incredibly widely, telling people not to buy gas from certain companies, and another that declares September 1st "No Gas Day."

 

Here is a (no doubt) partial list of totally idiotic mistakes in that e-mail:

 

1) If nobody buys gas today, but everybody drives the same amount, then it just means that we either had to buy more gas in anticipation of not buying any on September 1, or that we will buy more a few days later. So even if you believed this would take a $4.6 billion dollar bite out of the oil companies that day, consumers would hand it right back over. If this was "No Starbucks coffee day" it might have some chance of mattering, because people buy and drink Starbucks coffee the same day, so a foregone cup of coffee today may never be consumed. But this is not true of gasoline, especially if no one is being asked to reduce gas consumption. All you will get is longer lines at the pump the day after.

 

2) A one day total boycott of gas would not reduce oil company bottom lines by anything like $4.6 billion, even if it was accompanied by a one day moratorium on all gasoline use. Americans consume about 9 million barrels of gas a day. There are about 42 gallons in a barrel, so that equals 378 million gallons of gas sold a day in United States, or about one gallon per person. Toss in another 10% for Canada. At $3 a gallon, that is about $1.2 billion in revenues. Profit as a share of revenues in this industry is probably 5% or less, so the bottom line impact is a max of $60 million…about 1/100th of the stated number. And from point (1) above, even this is a gross exaggeration of the true impact.

 

3) One day of no purchasing of gasoline would certainly not cause the oil industry to choke on their stockpiles. Gasoline inventories in the US are typically about 200 million barrels, but right now they are on the low side — a big part of the reason why gas prices are high. 9 million extra barrels would create no problems whatsoever for stockpiles.

 

So everyone, please buy gas on September 1st.

 

The other bright idea of not buying from one of the "big" companies is also ridiculous. Firstly, the big ones most likes own the small ones. Secondly, you end up buying the same amount of gas, so gas consumption does not go down!

 

And if you ever have the bright idea to circulate an email like this, at least tell people NOT TO USE gas, rather than not to buy gas.

 

If you really want to cut down on your gas consumption (cost), trade in your 4×4 or pick-up, and buy a more fuel efficient car!! Besides, laws of economics tell us that prices only go up, they do not go down.

 

Article adapted from Freakonomics.