| In okc many stations buy from the same wholesaler, I know this because when I called this wholesaler to find out if I could get gas from them, they said the only station they sold their 93 and 110 octane to was the shell station, the rest wouldnt buy it they told me. Where do you think the wholesaler gets it from? If he has a contract, he gets it from his contractual supplier, but otherwise he gets it from whoever will provide it to him at the cheapest cost. He probably gets it from multiple oil companies, including Exxon. Anyhow, assuming that all of the local stations use one single wholesaler, then if you stop buying from Exxon branded stations and instead buy from other stations, the wholesaler sees no change at all. This hurts the local franchises, but does not hurt the wholesaler. The amount to which it hurts the Exxon to lose these franchises is minimal, because although they get a small percentage from the sale of each gallon, this is incredibly miniscule in the grand scheme of their income. They are still selling their gas to the wholesaler. They are still selling gas to the rest of the world (and also still making any of the residual income from franchises in the rest of the world). They are still selling oil products to industry in the USA and the rest of the world. The amount of oil that Asia and India demand has grown substantially and is still increasing. If Exxon lost all of its branded franchise stations in the USA, it wouldn't make a significant enough dent in their profits to make a change to the consumer price of gasoline. Now how many steps are in the ladder between OPEC and the corner shell station and on how many of those steps does ExxonMobil participate in, I dont know, but I know they do not have a refining-process-to-pump involvement, that is illegal and has been for a long time. And the reason was to prevent unethical price gouging that could not be combatted by the consumer. Because they don't have processing-to-pump exclusivity, you can't hurt them with a boycot at the pump. That's exactly the problem. By not buying from an Exxon branded station, that doesn't mean you are not buying Exxon gas. If they made most of their profits through the profit-percentage-per-gallon-sold from retail gasoline at Exxon branded stations in the USA, then maybe it would have a chance at being effective. But as it is, they can sell their refined gas to any wholesaler or station who is willing to buy, and they sell to industry, and they sell to the rest of the world, and they sell more than just gasoline. The reason our current "price-gouging" is not being tackled by gov is because the consumer is not defenseless, but rather indifferent. Or perhaps because the price hasn't reached it's most efficiently capitalistic point on the supply/demand curve. And the gov't wouldn't want to stand in the way of good ol' American capitalism in private industry, nor would they really want to piss off some of their biggest and most reliable political contributors and lobbyists. Consumers can still affect ExxonMobil enough in the retail sector to make a difference. Yeah, we could make a small dent if we could stop them from selling refined gasoline to wholesalers and other stations. The other retailers arent exactly smalltime. Private citizens dont buy enough gas to affect things at the wholesaler level, If we don't buy enough gas at the wholesaler level to affect things, then how do you expect to affect things on the level beyond wholesale? but the reason the barrels of oil have become so expensive is because thru our own indifference we have allowed retailers to steadily inch up the price little by little, literally the slippery slope, and now OPEC is cashing in on it from the top not allowing those further down the chain to rake in all the profits. This is true to some extent. By raising the price gradually, the oil industry has avoided a major backlash that would have occurred and caused people to question their demand for gasoline as a whole. Demand for gasoline as a whole would affect price, but the demand is schismed across the globe and throughout industry as well as throughout the public. But as it is, we have not significantly changed our demand for gasoline consumption as a whole, and until we do there will be no change in price. You can change demand for Exxon branded stations, and those stations will go out of business, but the price of gas at the other stations will not go down and Exxon will just sell their gas to the other stations (either directly or through wholesalers). There is only 2 ways to do anything about that.
1) The US and Canada become major suppliers of crude oil through all that mumbo jumbo about arctic oil fields, and break OPECs grip on the world market (which I have never understood why we havent done by now since arabs all hate us and scapegoat us anyway, might as well give them a good reason). Assuming that all that oil they think is up there actually is up there, is accessible, and is viable, then it would certainly be a damn good start. And while it might not prove to be a permanent fix, it could certainly be a potential relief for the time being. Of course, this is assuming that whoever ends up in charge of selling/distributing the oil that we get from the Arctic is a generous and altruistic company that doesn't want to maximize profits by charging the same rates as OPEC. Yeah, that'll happen... 2) Or consumers have to reverse the trend through less consumption (already being done somewhat through the trends in hybrid cars, ever increasing mileage standards, environmentally concious treehugger practices becoming more popular) which can be very difficult and impractical as well as difficult to motivate popular support for. This would affect demand on gasoline as a whole, yes. And they can consume as usual but create price competition by not being indifferent to where they get their gas from. This is not the same solution, and this idea relies on the assumption that not buying from one particular franchise of stations will actually affect how much gasoline the refining company sells. If the stations were only allowed to sell the gas that is made by their franchiser's refineries (and if other independent stations didn't also buy from the refineries), then this might have a chance at working. But even if their franchised stations close down, Exxon is still going to be producing and selling the same amount of gasoline unless we reduce our demand as a whole. The only thing they are going to be missing out on is that fraction of income that they got from the percentage-per-gallon-sold at franchise stations, which ultimately is chump change to them. It only makes sense to force the largest retailer to lower prices, EM isnt guilty of anything more than being the largest, but if consumers want to see reversal in price trends they would have to get the largest to start it if they want to see results quickest. Even then we are talkng about months/years not weeks. If consumers want to see a reversal in price trends, they need to make the oil companies have to sell more units at a lower price per unit just to make the same gross profit. let's say I make cardboard boxes.
I sell them to wholesalers who then sell them to retailers, but I also sell them directly to retailers, and I also sell them directly to franchise retailers.
If I sell them at $1 profit-per-box and 100 people want them, then I can make $100 profit. The distribution of how many are bought through my franchises, the independent retailers, and the wholesalers doesn't mean shit to me, because there are still 100 people who want them at $1.
If I then choose to raise my profit margin to $2-per box (assuming fixed overhead and raw materials costs), but now only 60 people want them at that price, I am still going to do it. I can make $120 profit by selling less boxes at $2 than I did by selling more boxes at $1.
So now some of the people who are buying the boxes at $2-profit are kind of pissed because of the raise in price. They boycot my franchise retailers and buy it wholesale or from another retailer. Well, I am still selling that same number of units at the same price, so I have no reason to change my price. My franchisees can go fuck themselves. Boycotting a single chain of franchisees is not going to change the efficient point of price on a supply/demand curve. You have to change the actual demand-per-price.
"The two seater is being joined in a few weeks by a larger two-plus-two model with a rear seat for munchkins." ~Jim Mateja, Chicago Tribune, in regards to the Z32.
Andrew Janeshek // jnshk@aol.com // 1992 NA 2+2 [Stage 2-ish]
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