Tuesday, April 25, 2006

How to make gas prices go down

This is such an interesting perspective:

USATODAY.com - Drivers curb use as gas goes up: "'If everyone decided to drive 3% less the next 30 days, prices would crash,' says Tom Kloza, senior analyst at the Oil Price Information Service."

The reason why just a 3% reduction would have an effect is because supply and demand is so finely balanced in the gasoline market.

The funny thing is that would be easy to save 3%. A month has 30 days in it. So if you were to simply take one day off and not drive at all that day, it would be a 3% savings in your gasoline consumption. It would be that simple. The question is, how do we get everyone in America to do that?

How would reducing gas consumption by 3% over a month have an impact on the long term gas prices? Sure, this month's total revenue would suffer for the oil companies, but next months would be as normal or even more because in my mind most people would wait until the last day of the month to do this and then burn twice as much fuel on the first day of the next month making up for all the things they missed.

This type of thinking has to be implemented by increasing total fuel efficiency over the entire life-span of a vehicle versus over a subjective month. By reducing fuel consumption due to innefficiency, the savings are applied automatically and you don't have to worry about people peforming 'feast or famine' behavoir.

I suppose as fuel prices increase, people will automatically start practicing this behavoir because they need ways to mitigate the price of the fuel. Of course, when you really think about it, a increase of $.20 a liter (here in Canada) isn't that big of a deal...
I don't want gas prices to go down. These high oil prices are fueling my retirement income, so go ahead, buy that SUV you always wanted, meanwhile I'll be riding my scooter in Maui.
Better yet.. find the one gas station with the least price. Go in and buy a loaf of bread, coke, and milk and thank them for not price gouging.

Gas stations don't get rich off of gas. They lose money.

They make money on coffee, hot dogs, beer, cokes and pepsis, chips and bread.

So when a good customer says thank you, they take notice.
You could try to convince the entire country to observe the sabbath like Orthodox Jews do and not drive every Saturday. Although, somehow, I don't think that would be too easy.
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