Why a gasoline boycott won't work

NEW YORK (CNNMoney.com) -- It's easy to hate Big Oil. Gasoline prices are at record highs, over $3 a gallon. Oil companies have so much cash they can't figure out where to spend it.

So when an e-mail arrives urging people to buy no gas on May 15 - saying it would take nearly $3 billion away from oil companies "for just one day" and promising a 30 cent a gallon drop in gas prices "overnight" - it's awfully tempting to go along, savoring that bit of guilty pleasure knowing you're sticking it to Exxon Mobil (Charts, Fortune 500), Chevron (Charts, Fortune 500), BP (Charts) or what ever oil company sells gas on your block.

Don't be fooled.

"A one-day boycott makes no sense whatsoever," said Tyson Slocum, energy program director at Public Citizen, a national consumer advocacy organization. "You're not reducing consumption, you're just buying on a different day."

The chain e-mail urging the gas boycott has been around for several years, surfacing most years in the springtime. No one spoken to for this article knew who started it, but it doesn't appear to have originated from any consumer or environmental organization.

"It's just one of those weird things that originates on the Internet," said Slocum.

Many of the numbers in the e-mail are either misleading or flat out wrong.

The promise of depriving oil companies of $3 billion dollars a day assumes all the Internet users in the country would normally fill up their cars on the same day, which is of course absurd.

And what about the 30 cent-a-gallon price drop, which the e-mail claims happened during a similar boycott back in April 1997?

"It's absolute urban legend," said Tom Kloza, chief oil analyst at the Oil Price Information Service, which tracks gasoline prices for the motorist organization AAA. "There was no such drop."

Kloza said he looked into prices for all of April, 1997, and said for the entire month they didn't move by more than a penny.

The reason prices didn't budge is that people will still use the same amount of gasoline for the week or month. The Energy Information Administration, which tracks gasoline demand every week, said they've never observed a drop in demand for any week in the spring that could be associated with the boycott.

And gasoline, being bought in bulk and traded on a futures market for deliveries arranged months in advance, is a commodity whose price is susceptible to long-term trends, not one day blips. If people don't buy the gas Tuesday, they'll simply buy it Monday or Wednesday.

What might not get bought are the coffees, newspapers or muffins that convenience store owners, who franchise the vast majority of the nation's gas stations and make very little profit off gasoline itself, rely on to keep their shops open.

Paul Fiore, a spokesman for the Service Station Dealers of America and Allied Trades, said his members were not concerned about the boycott because in years past not many people participated.

But Fiore said the boycott could be problematic if it took off.

"We hope citizens understand that they are not harming an oil company, but a small businessman," he said.