Gasoline Boycotts – How much do big oil companies care?

Recently I’ve gotten a rash of Facebook event invites, emails, and other general online suggestions that I should participate in various gas boycotts. The proposal is that we all setup a a single day where no one in the country buys any gasoline at all.

Sadly, there is no single organizer for these protests, so there are literally hundreds of different groups advocating boycotts on different dates. But, aside from the logistical challenge, I’m still confused as to exactly how  people think this kind of boycott would achieve anything.

These groups either claim to want to “send a message” to the “big oil companies”, or they claim that this will “hit them in their bottom-line”. These groups are run by idiots.

How does not buying gas on one day matter to the “big oil companies”?

Have you actually thought about this at all? It isn’t like I buy my gas straight from big oil… sure, the local gas station’s signs have BP logos all over them, but BP doesn’t actually own and operate those individual gas stations. It isn’t like the money flows from my debit card straight into some big oil company’s bank account.

Sure, the gas station owners would really notice, and they may even be inconvenienced slightly. But the gas stations aren’t the ones that set your gasoline prices.  And gas stations don’t pay their big oil suppliers on a daily basis either; they tend to pay their gasoline bills on a monthly or quarterly basis.

It really doesn’t matter to the big oil company on which specific day any particular individual choses to pump gas into their little car.

And what message are you planning to send with this boycott? It isn’t like people are advocating a day of not driving, so just as much gasoline would be used up that day anyway; boycott or not. The small fraction of people that would normally have chosen to buy their gas on boycott day would just have to fill up the tank a day earlier or later; but they’d need to buy exactly the same amount as they would have had there been no boycott at all.

Unless you actually reduced the actual usage of gasoline, it doesn’t matter exactly when you buy the gas. But  even if you did manage to get everyone in the U.S. to stop using gasoline for one day the best you could achieve by a one day reduction in gasoline usage would be a 0.27% drop in oil company profits (and that, only if you make the false assumption that their profits only come from gasoline sales).

Let’s put that in perspective…

Let’s assume that we had boycotted, successfully, for one full day last year. And we further assume that during the boycott we also didn’t use any gas either. And then we made the (blatantly false) assumption that all oil company profits come from U.S. gasoline sales.

How much would it matter to big oil?

Well, using the simplest math possible; such a boycott in 2010 would have reduced Exxon Mobile’s bottom-line by around 67 million dollars. So yeah, Exxon would have only made 30.43 billion in profit, instead of the full 30.5 billion that they actually reported last year.

I’m sure big oil is just terrified of those gasoline boycotts and is slaving away right now trying to find some way to appease those disgruntled U.S. motorists.