"Fill 'er up!" Not bloody likely. It's more like I wonder how far I can get on $10 worth...

Not very far. (Not even at the O.P.I. counter!)

And yet, when I received a forwarded email today about boycotting gas stations on a certain day in the hopes of causing a price war, I rolled my eyes. Why? Because boycotts don't work.

You may not realize that most gas stations are franchises, meaning the owners buy the fuel from Exxon or Shell (etc). They build in a certain profit margin, add the applicable taxes, and then pass it on to the consumer. The local and federal taxes are non-negotiable and the fuel costs are based on macroeconomic factors (and I'll get into that in a sec) that care nothing about a little price war in Gimli, Manitoba or Canton, Ohio. The only wiggle room left to sustain a price war comes from the station owner's profit.

When the gasoline profit is cut for competition reasons, the bacon must be earned somewhere else. As long as the average Joe comes inside and buys a $2 Mars bar and a slurpee, the business makes up the difference. That was before the recession here in the US. Now, most of us swipe our cards at the pump and only go inside to ask directions to the interstate or use the restroom. Result: gas stations lose their profit margin and operate at cost. Owners and employees take the pinch and the price war doesn't even blip on Exxon's radar. Sure it saves you a couple of bucks, but it might cost someone their job.

So, let's say you could persuade the entire country to participate in a one day boycott. The oil companies know that if you don't buy gas on Monday, you'll tank up on Sunday or Tuesday. It will make up most of Monday's loss and their sales will be unaffected.

The price of oil is driven by: the costs of exploration, extraction, refinement and distribution, world currencies and economies (and by extension, world stock markets), geopolitical issues (e.g. war, trade agreements), weather-related catastrophes, and the enormous profit margins enjoyed by OPEC-member countries and oil barons. It is not affected by a 10¢ drop at the pump.

So what can consumers do? Just as in a price war, we can squeeze the profit - but this time with the giants.


1. Reduce your oil consumption.

Duh, yes. Drive less, carpool/public transit more. Buy a fuel efficient vehicle or scooter. The economic principles of Supply & Demand suggest that if we use less, more will be available at a lower price. Before you switch though, consider these:

-ethanol is not the ultimate solution. It is part of the reason our staple foods (think bread, vegetables, etc) have increased in price because instead of eating our crops we are burning them. It is better than fossil fuels, but still needs to be processed and transported.

-electric and hybrid vehicles need to get their energy from somewhere. Know what your regional power sources are: coal? nuclear? hydroelectric? They all have pros and cons.

-getting better fuel economy should not discourage you from driving less. There is still pollution coming from your tailpipe, and highway congestion is a big problem.

2. Adjust your investment portfolio.

Find out if any of the stocks you own are tied to Big Oil, and change that. Rising stock prices line the pockets of the fat cats; they do not create bargain opportunities. Lately, the price of crude has jumped from the low $100s/barrel to over $130/barrel.

At the same time, stocks in solar technology have skyrocketed as savvy investors recognize that this is one of the important trends for the future. As a self-directed investor, I have heard a lot of buzz about wind energy companies set to list on the New York Stock Exchange soon. I, for one, will be waiting with money in hand. Line your own pockets while you stick it to the oil giants!

3. Buy local products.

Everything at the supermarket, furniture store, and mall is shipped from somewhere. Buying from local producers reduces shipping needs and the associated pollution. Your food will be fresher and you support your local economy.

4. Vacation locally.

Check out the vacation opportunities in your state/province. A trip to the beach or a charming B&B will consume less fuel than a Cayman-bound 747. Maybe get to know your city's museums and galleries properly. I personally find vacationing in a 3rd-world country inside a gated compound vaguely depressing, anyway.

Ultimately, using these and other creative ideas to reduce your gasoline use will benefit you as much as the environment because it saves you money. I have found that using the frugal argument is more effective than thumping with my "Save the Whales!" shtick when trying to encourage my friends and neighbors to rethink their eco-footprint.

What other methods do you use to decrease gasoline use? Please share them in the comments!