Would a gasoline boycott lower prices?

John W. Schoen Senior Producer • Profile • E-mail

With pump prices stuck above $3 a gallon, Mark in California -- along with a number of other Answer Desk readers -- have decided it's time for a nationwide gasoline boycott. If they ever pulled it off, gas boycotters could be in for a nasty surprise.

HOW ABOUT A GAS BOYCOTT?
Is it true that if the American people decided to stop buying gas – period - the oil and gas companies would have no choice but to lower the price of gas because they produce so much that they would have no place to put or store the gasoline?
Mark P. -- Colton, Calif.

A short-term boycott would have little long-term impact on pump prices — even if you could convince everyone in the country to stay put for a few days. (Of course, you’d also have to suspend all deliveries, require police to patrol on bicycles and tell those in need of a fire truck they'll just have to hold on for a few days. You get the idea.)  And as soon as demand went back up to “normal” levels, you’d be right back where you started.

In fact, the impact of a widely organized boycott would probably drive prices higher in the short-term, as all the boycotters topped off their tanks to get ready for gasoline fasting. It’s been estimated that on any given day there’s more storage available in the combined empty space in the gas tanks of all the vehicles on the road than there is in the national gasoline distribution system. If we all filled up at once, we’ll likely drain the system dry. Then you could be looking at $10 a gallon gas.

So it’s a better idea to try to conserve as much as possible, every day. That way, you can still get on with your life.

GAS PAINS
How big is current daily nationwide fuel consumption in the USA?
Dmitriy N., Canyon Country, Calif.

American drivers burned through an average of a little over 9 million barrels a day (that's a little more than 378 million gallons) in the week ending Sept. 2, the latest figures available from the U.S. Energy Information Agency. 

But even those 10-day-old numbers were already beginning to show a drop in consumption heading into the Labor Day weekend -- typically one of the busiest driving holidays of the year. With prices up sharply from last year, demand for gasoline that week fell by more than 500,000 barrels (about 21 million gallons) a day from the week before. (That was also about 500,000 barrels a day less than  Labor Day, 2004.

Demand always falls off when the summer driving season winds down, and it keeps falling into the winter months: It’s just too cold for most people to go camping in to Yosemite. By last February, consumption hit a low of about 8.8 million barrels a day. With gas prices running roughly $1.20 a gallon higher (on average) than they were a year ago, it’s a pretty safe bet U.S. gasoline consumption will keep dropping this fall.

The question no one can answer is whether demand will fall fast enough to prevent tight supplies from driving prices even higher. Even before Katrina hit, U.S. refineries were barely able to keep up with demand. Now, with some 5 percent of refining capacity still knocked out by storm damage, it's going to take a flood of gasoline imports to take up the slack. A lot will depend on how long it takes to get those U.S. refineries repaired -- and find a place to live for the workers made homeless by the storm.

In the meantime, leave the SUV in the driveway whenever possible. It’ll help cut consumption. And you’ll save a few bucks, too.

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