Thread: A warning about a hoax

Originally Posted by thkoutsidthebox

I don't know if you would class it as a hoax....more an idea....I received an email the other day from a friend saying that everyone should stop buying petrol from ESSO and BP because they are the biggest suppliers in the world, and if their profits fall they will have to reduce prices, and because they are the biggest, the remainder will then have to reduce profits to compete. It said to shop for petrol anywhere you want, except ESSO or BP. It then went through some numbers about forwarding the e-mail to 10 people, and how theoretically in 8 days 300 million people could be reached. If all these stopped buying in BP & ESSO, then consumer power would force a price reduction and take control of the market away from the suppliers, and back into the hands of the buyers....
...slightly off topic maybe....I checked it for viruses and forwarded it. If such 'schemes' actually worked it would be a triumph for email and consumer power, but I guess they usually don't.

There's a pretty good explanation of why this isn't likely to work here: http://www.snopes.com/politics/gasoline/gasout.asp

Peter

Originally Posted by Wolffie

Not terribly away from woodwork as it has been circulated among woodworkers.
Wolffie

That 'll do me. I don't want to get into strife for doing the wrong thing.

Originally Posted by thkoutsidthebox

If all these stopped buying in BP & ESSO, then consumer power would force a price reduction and take control of the market away from the suppliers, and back into the hands of the buyers....
.

Sounds great if you haven't thought much about petrol refining and Retailing in Australia.

Apart from a small amount of independent imports, there are limited refinery companies operating in Australia, and they supply virtually all the petrol to all the retailers. None of them has the capacity to supply the whole market.

Caltex (NSW & Qld Refineries)(220k) barrels/day),
Shell (NSW & Vic)(230k)
BP (Qld & WA)(210k)
ExxonMobil - Esso (Vic)(75k)

There are 7 plants operating. Exxon has a mothballed plant in SA.

So. everyone stops buying from BP and Esso. Shell and Caltex experience a large increase, and maybe they cannot supply all the market. What do you think would happen?

I can think of 2 scenarios, (I'm sure there are others) and both of them probably result in higher prices:

1) Shell and Caltex put their price up because they have more demand than they can supply, and their immediate costs hike trying to move nearly twice as much fuel around the country. Qld and Vic wouldn't be too bad, but with the only WA plant being run by Exxon, buying non-Esso fuel means it will be freighted from the east.

2) Shell and Caltex put their prices up, as they buy the fuel from BP and Esso at a price higher than their own production cost.

#2 makes the most sense to me, as in all likelihood, the refiners are already trading fuel between each other, and the only people to suffer out of such a ban would be the motorists driving further to find the right servo, and the employees of BP and Exxon servos being put off whilst the silliness continues.

That is, if you could get a significant number of Joe Public to carry out the selective buying (and get it right) in the first place.

Bear in mind that retail petrol is not the only market for the refiners. A lot of industry and transport would be dealing with them under contract.

Refining info from wikipedia

woodbe.