Outraged at Gas Prices?

Every time gas prices go up substantially emails like the following are circulated:

The only way we are going to see the price of gas come down is if we hit someone in the pocketbook by not purchasing their gas! And, we can do that WITHOUT hurting ourselves. How? Since we all rely on our cars, we can't just stop buying gas. But we CAN have an impact on gas prices if we all act together to force a price war.

Here's the idea:

For the rest of this year, DON'T purchase ANY gasoline from the two biggest companies (which now are one), EXXON and MOBIL. If they are not selling any gas, they will be inclined to reduce their prices. If they reduce their prices, the other companies will have to follow suit.

But to have an impact, we need to reach literally millions of Exxon and Mobil gas buyers. It's really simple to do! Now, don't wimp out at this point.... keep reading and I'll explain how simple it is to reach millions of people.

I am sending this note to 30 people. If each of us sends this e-mail out to ten more people within one day of receipt, all 300 MILLION people could conceivably be contacted within the next 8 days!!!

I'll bet you didn't think you and I had that much potential, did you?

Acting together we can make a difference. If this makes sense to you, please pass this message on. I suggest that we not buy from EXXON / MOBIL UNTIL THEY LOWER THEIR PRICES TO THE $1.30 RANGE AND KEEP THEM DOWN.

The fact that nothing has ever come of these emails should tell you something.  Basically, the reason it wouldn't work (if enough people actually got together and did it) is that gas production is just about at its limit, and if you cut out the major supplier, the rest would run out of gas, causing the price to go UP.  Exxon / Mobil, who has been sitting on the sidelines waiting for this to happen, would then enter the market at the higher price with all their capacity and make a killing.  They must be watching emails like this and saying, "Go ahead, make my day!"

Economics 101 says price is dependent on supply and demand.  China and India have entered the energy market in a big way, increasing demand.  Prices go up!  Prices will stabilize as oil producers increase supply, but the higher cost of going after the remaining reserves (oil from shale, for example) will mean that the price will not go down from the supply side alone.  If Americans really want the price to go down, they will have to use less oil to compensate for China and India's demand.  "But that would hurt!"  Yes, but did you really expect anything different?  Most Americans won't change their life style and use less gas unless they're really hurting, and the hurt is always the higher gas prices.  So get used to them—they're here to stay.