Originally Posted by willwren
The larger companies have more sway with OPEC. If you don't buy gas from them, they will have to lower their prices. The other companies will have to follow suit to keep competition even.
Many of you don't remember the 'gas crunch' of the 70'*. I do. This is one idea that will work.
A couple more points;
The US imports more petroleum and related products from Canada than from any other supplier - including Saudia Arabia.
I don't believe that any gasoline is purchased from the Middle East. Most is refined in the US with some purchases from Venezuela and Brazil.
The US dollar has declined at least 20% versus other majour currencies. If you look at the price of a barrel of oil in Euros over the past year, the price has changed little.
There has been no new refineries built in the US in the past 20 years.
US demand for gasoline is at record levels.
US refineries recently took downtime to perform regularly scheduled maintanence. Since then, while changing the mix of distilates produced away from heating oil towards building gasoline inventories, production has in fact declined by about 1.5% to about 85% capacity utilisation.
If the plan is to avoid one company in the hopes driving down prices it'* effects will be muted and short lived. Since there is only so much refining capacity available, if you stop buying from X to buy from Y, Y will not have enough capacity to meet demand and will need to purchase wholesale from X.
Refining is a low margin business that has a very hard time earning its cost of capital over the life of the plant. If you look at the financial results of the integrated producers you'll see that their downstream operations ( gasoline distribution and retail ) are their weakest areas. If it weren't that gas stations were selling coffee and donuts and the like there would be far fewer of them around if they lived off the profits of gas.
When you consider the decline of the dollar, record levels of demand, a capacity constrained industry with an ever complex regulatory environment - ultimately you will be paying considerably more for gasoline in the near future unless demand is curtailed meaningfully - not just a matter of playing a shell game.
BTW - last time I was in England (I was born there) 3 years ago, it cost me $67 US to fill a VW Jetta.