I Believe Consumers Can Affect Gas Prices

Winter is typically the time of year when we use the least amount of gas.  Travel is down because people aren’t doing the amount of vacation travel that happens over the summer, meaning that gas consumption is down.  Since demand is lower, this usually means that the winter sees the lowest gas prices of the year.

Not this year, so far!

I’ve noticed a trend that gas prices start climbing in advance of the summer season earlier and earlier each year.  It used to be that prices would start rising in April and peak around Memorial Day, then level off and start sliding down a bit after the Fourth of July.  The earlier part of those trends moved back a couple of weeks, and this year is no exception.

Gas prices here in Michigan started a pretty big upward trend around the middle of January.  Our normal station bottomed out around $3.29, and over the last month has gone up sixty cents!  That’s right, prices earlier this week stood at $3.89.

Even though we don’t typically spend a lot on gas since I have a very short commute to work (6 miles total each day) and my wife stays at home, limiting her mileage, I still keep an eye on gas prices, and I get very annoyed when I see stations raising their prices to the degree that they have.  I simply have no tolerance for prices jumping up 5-10% at a time (notice that when they do fall, it’s never more than 1-2% at a time?).  Last week, I filled up at $3.49 and when I drove home, the station price was at $3.79.

Virtually nobody else gets away with price flucuations like this.  Imagine if the government were to raise your taxes and adjust those to this degree.  Chaos!  Imagine if your grocery bill went from $75 to $90 over the course of a week for the same basket of items.  No way!  What if the new car you looked at last week for $30,000 was now stickered at $33,000 and the dealer just said ‘Eh, what are you going to do?’  I don’t think so!  And the best one of all, what if your boss came to you and said, here’s a 20% raise.  Enjoy it, but we’ll probably take it away.

Not in a million years!

None of those things happen but the gas prices going up and down and all over the map is somehow supposed to be perfectly acceptable.  It drives me crazy and is one of my hot buttons.  If I see the price go up and up, the first thing I’ll do when I get home is announce today’s price increase.  Then, I’ll go check Facebook or Gas Buddy forums and find…nothing.

Apparently, I’m the only one outraged these days.  Or am I?

It made me stop and wonder, is there any way that we can affect gas prices?

Don’t buy gas on Tuesday

Back when gas was first going through its big run-up a few years ago, people actually were outraged, and at least once a week, I’d get an e-mail proclaiming ‘DO NOT BUY GAS ON TUESDAY!’ Or whatever day happened to hit someone’s hot button.  The rationale is that a day of no sales would drop demand so quickly that prices would have to drop.

I’ve always thought that these were completely absurd.  First, people need gas and are just going to go get gas when they need it, more often than not.  Following this strategy would mean that people would have to fill up earlier than they might otherwise (not likely) or that they’d chance running out of gas (don’t think so).  Besides, nobody did it!  I’d drive by gas stations on so-called ‘Do not buy gas’ days and I’d see as many cars filing up as any other day.

Stop Driving

People say that one way to push down the prices are to drive down demand.  Do this by driving less.  Again, this one sounds great in principle, but it’s probably not going to happen.  When people write stuff like that, they must assume that millions of people get in their cars every day and aimlessly drive around for miles at a time.  If this were the case, then we could all at once cut out these unnecessary trips and gas prices would fall.

Unfortunately, that’s not the case.  While some of our driving could be curbed, the fact is most driving is tied to activities like going to work, going to school, going to the grocery store to buy food for your family, or other trips that simply can’t be cut off.  Delayed? Maybe, but not cut off.

Drive with better gas mileage in mind

Every time gases cross a mark (if they get to $4, just watch these e-mails start), you’ll get e-mails and blog posts talking about how we need to drive to improve our fuel economy.  Don’t gun it.  Coast up to stop lights rather than brake, so that you can perhaps not have to come to a stop, reducing your usage.  Drive 60MPH instead of 70MPH.  We’ve all heard them, but the fact is that people drive as they drive, and any changes like this are only temporary.  You’re not going to turn a speeding, tailgaiting jerk into a Sunday driver just by sending an e-mail.  Not enough to affect gas prices anyways.

Buy more fuel efficient cars

We’ve been improving the fuel economy on the average car for years, but still gas prices have not fallen.  Besides, reports now show that consumers are buying more full size pickup trucks than ever before, so while some focus on economy, by and large, I just don’t think this is a priority.  You’re not going to see the roads in the United States resemble those in Europe (filled with compact cars) anytime soon.  Again, good in theory, but a non-starter from a ‘can we really impact prices’ level?

My Idea: Stay Out Of The Gas Stations

Here’s an idea I’ve been throwing around in my head as the only possible way that I can think of that might actually impact gas stations.  Stay out of the stations!

Note, I didn’t say don’t go to gas stations.  I said stay out of them.  As I outlined above, you still need to buy gas, so continue to do so. But, where I’m going is to buy gas and then leave.

See, it’s a well known fact that gas stations make a majority of their money not from actually selling gas, but they make it from the convenience stores attached to said gas stations.  No gas station is every built these days without a big store attached.  Inside you can find your snacks, your soda, your coffee.  You can get newspapers and magazines.  Need washer fluid or some extra motor oil?  No problem.  Gum, candy, lottery tickets.  You bet.  Even beer and wine at many stations depending on what state you’re in.

It’s all very convenient, but what if we cut off that profit source?

See, gas station owners are well known for saying that they have no control over prices.  The prices are set by the distributors or parent company, especially for company owned gas stations.  I’ll focus on Speedway (or Speedy America depending on where you live) as an example, because they own all of their gas stations.  Speedway is the biggest culprit for raising gas prices with big gaps.  They don’t even pretend to wait for the next batch of gas to come in. They will see that the wholesale prices are going up and they’ll order all stations to do an immediate increase.

Don’t tell me that these stations aren’t making money.

What happens then is that gas stations surrounding Speedway will raise their prices as well.  At least where we live, Speedway is the first to raise prices 90% of the time.  Count on it.

Yet, every time I go in Speedway for any reason, I have to wait in line.  Not for people to pay for gas, but for people buying hot dogs and chips and all the other stuff I mentioned above.  What happens if those people all stopped going in?  What if people went to McDonalds to get their coffee? Or to the drugstore to get their newspaper?  Or…well, you get my point.

See, stations owners might have no control over gas, but I don’t think they actually do much about it when the prices go up.  If customers complain, they shake their heads and say that there is nothing they can do, but do you really think they get on the phone and argue the price increases?  No.

Do you think they might if they saw their convenience store profits cut in half?  I think maybe.

Do you think Speedway, if they saw their coffee sitting their going bad on the warmer instead of being sold, would be as quick to raise prices if customers stopped going into their stores when they decided upon a 30 cent increase for no particular reason?

I’m not going to say yes with absolute certainty, but I’m thinking it could have an effect.

See, if gas stations owners aren’t making money on gas, they really don’t care.  But if you hit them where it hurts, in the store, I believe they would actually take notice.

So, what do you say?  Can we start a movement to speak with our wallets and take the gas station convenience stores off of our shopping list when prices keep spiking up?  Or is my thought another waste of time just like ‘Do Not Buy Gas On’ days?