Gas boycott unlikely to ‘make dent’ in oil profits

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May 7, 2007

By Karen Middleton The News Courier Mon May 07, 2007, 10:06 PM CDT

By now, many local e-mail users have received a message about the May 15 “gas out,” requesting motorists to abstain from purchasing gasoline on that day.

The originators of the e-mail predict that Americans can deprive the big oil companies of $2.2 billion in profits for that single day alone by not pumping. The message claims that a similar gas out in 1997 immediately resulted in lower gas prices.

But while most can sympathize with motorists’ frustration about spiking pump prices—the e-mail is sweeping the nation—similar attempts in the past to put the muscle on oil companies have been ineffective. Unless you want to let the car sit in the driveway, sooner or later, you will have to fill up, and that just shifts the profits to another day.

According to several Internet sites devoted to debunking the latest urban legend, “gas out” e-mails circulated in 1999, 2000, 2004 and 2006, but no one has been able to find an April 1997 gas-out campaign.

Pump panic

The Lundberg survey of 7,000 gas stations nationwide found that just two weeks ago the U.S. average was $2.87 a gallon for regular grade gasoline. As of Friday, there had been an increase of 19.5 cents to $3.07—up 88.4 cents since Jan. 19, according to the Lundberg report.

Locally, the range of prices Monday was $2.83.9 up to $2.97.9.

The steep climb in gas prices has prompted Sen. Charles Schumer, D-N.Y., to call for a federal investigation into the oil refineries. According to a Monday Newsday.com report, Schumer says the oil companies are being lax on maintenance, and are working at just 88-percent capacity to keep prices higher.

Mike Segrest of Spencer Oil Co. said no one in his office had been told anything by suppliers, but he said it’s highly unlikely that oil companies are creating the shortage to force prices up.

“The problem is just something out of economics 101—the law of supply and demand,” said Segrest. “The issue isn’t with crude; it’s the availability of the refined product. Refineries are not able to keep up with the demand.”

Segrest said the problem is a shortage of refineries nationwide.

“There’s not been a refinery built in the last 30 years,” he said. “One little blip in the system causes production to go down. This country—environmentalists—won’t allow refineries to be built.”

Segrest said joining the May 15 boycott would be nothing more than making a “statement,” and would not affect big oil companies.

“Big oil companies won’t feel it,” he said. “It’s the retailer, the mom and pop, those who are trying to make a living that it would hurt. The public will hurt the little guy but it accomplishes nothing.”