Pump closure makes national news
May 25th, 2007 | by mbhunter |A gas station owner in Wisconsin cordoned off his pumps yesterday in protest of high gas prices. He got kudos from quite a few passersby but others were scratching their heads as to what impact the closure would really have except to shift some of the day’s gasoline purchases to his competitors.
I’ve gotten quite a few don’t-buy-gas-day chain e-mails and disregard them because there won’t be enough people to make a real difference in the demand for long enough. Not buying gas on one particular day is not going to “send the oil companies a message” — they’ll just smile as they sell more of it to you tomorrow because you’re running low and you need to get to work.
The gas station owner, John Schwartz, had some interesting comments:
Schwartz called that “outrageous” and said even he can’t fill up his SUV at that price.
“If it keeps going like this, my kids will never be able to afford to
drive,” said Schwartz, who has an 18-year-old son and 15-year-old
daughter.
My response to the first comment: Well, no, you probably can’t afford to fill up your SUV at that price. But why is it outrageous? Why the outrage? And what about the option of trading in your SUV for a compact?
My response to the second comment: It’s just about certain that your kids won’t be able to afford to drive for very long. And forget about my daughter — I expect gas to be well north of $10/gallon when my daughter turns sixteen in 2021. Heck, inflation alone would push it past $6/gallon.
What’s going to push gas prices up beyond what most of us can afford is the oil supply. No amount of punishing the oil companies or blaming OPEC or outraging or jealously eyeing the profits of everyone in the petroleum industry changes this. Oil is so completely entrenched in our lives in so many ways that it’s all but guaranteed that we’ll deplete the available supply as fast as possible. One guy closing his gas station for a day — or a thousand — or one person not driving for a day — or a million people — won’t stop this. The rest of the gas station owners, and the rest of the drivers, will just smile and say, “Hey! Thanks for saving a little more for me to use!”
Three bucks is only the beginning. We ain’t seen nothing yet.
6 Responses to “Pump closure makes national news”
By Jon @ TheMoneyMythos on May 25, 2007 | Reply
“Schwartz called that “outrageous” and said even he can’t fill up his SUV at that price.”
I had a pretty good laugh at that line this morning!
Here’s hoping more viable means of alternative energy start arriving soon. I wouldn’t be surprised if we go through a several year period where oil is at outrageous prices while people rush to figure out better options.
By Tyler on May 25, 2007 | Reply
I predict the opposite happening. I think it will go back down to 2.00 range in the upcoming years because we’ll all change our habits like America did in the 70’s. Not to mention, we’ll have cars with much better fuel economy, people will use more public transportation, and we’ll recycle our plastics more. People are all so freaked out by this, and I have to admit, I am upset about it too, but because my wife and I budget, change our driving habits, carpool, etc, we save a lot of money. We also have no debt, we put a lot of $ into savings, we buy things responsibly, and increase our incomes year over year. If the consumer would stop buying the $4 cup of coffee at Starbucks everyday, they’d have plenty to use for gas. It’s all about opportunity costs. Stop buying stupid crap that is useless and realize that the important things like gas, food, homes, etc are more important than your stupid WANTS or MUST-HAVES.
By Chris on May 25, 2007 | Reply
I don’t think shutting down for a day in protest is going to do anything, but these two things caught my attention:
“he has not turned a profit in 30 months because gas margins are razor thin…the company usually makes 8 to 12 cents per gallon after suppliers’ prices and credit card fees.”
and the last paragraph “The protest came as several Wisconsin service stations announced they would no longer sell gas because they make little or no profit on it after they pay wholesalers, credit card fees and taxes. They said they would focus on auto repairs instead.”
A protest may not do anything, but the fact that many of these gas stations are making zilch on their gas sales is important. We already have gas stations on every corner, as gas prices go up (and their razer thin profits don’t) people are going to be buying less gas, conserving, etc, and these stations are going to go out of business.
At some point wouldn’t these stations give up on gas? Why put so much risk and effort into selling a product when someone else is making all the money off of it?
By Anitra on May 25, 2007 | Reply
Chris, you’re exactly right. I have an uncle who used to run a full-service gas station & auto repair shop. When his state required all underground tanks of a certain age to be replaced, he gave up on the gasoline business. He just couldn’t make enough money to warrant the tank replacement that he’d need to stay in business.
Why do you think nearly every gas station has a convenience store attached? They’re hoping you’ll come inside and they’ll actually turn a profit.
By flifla on May 26, 2007 | Reply
My classic car gets about the same gas mileage that a Hummer gets: approx. 9 mpg. I wonder what ecological impact the new hybrids and efficient “egg shaped” cars have by their mere production. Call me a true environmentalist: I recycle to the extreme.
By Mike on Jul 14, 2009 | Reply
Looking at this now, remember when gas was almost $5 a gallon. I know we’ll get back to point in the not too distant future. I think everyone would agree that the world is running out of fossil fuels and we need to find alternatives.