Do you ever get one of those emails about tips on pumping gas? You know, pump slower, only fill up in the early morning, always fill up at half-empty, et cetera. Well, today, I got another of those emails, but this time with a twist. At the end of the email was a section on not buying gas from gas companies that import oil from the Middle East. The email makes the argument that if we would not buy gas from the companies that import oil from the Middle East we’d be making a difference.
The end of the email included a list of companies that don’t import oil from the Middle East. The list was quite impressive and included some heavy hitting gas companies (Sunoco, Conoco, Sinclair, BP / Phillips, Hess, and ARCO) that are pretty common. After the list, the email indicated where to check each month to determine who was importing and who wasn’t importing from the Middle East (Crude Oil Imports from the Middle East in 2007).
So, I did a little checking. The Energy Information Administration which is a department of the Department of Energy has a great section on their website entitled Primer on Gasoline Sources and Markets. A quick read through the short document really puts into perspective the purported facts of the email. The real facts are:
Can I tell which country or State the gasoline at my local station comes from?
For several reasons, the Energy Information Administration (EIA) cannot definitively say where gasoline at a given station originated:
- EIA does not collect data on the source of the gasoline sold at retail outlets.
- The name on the service station sign does not tell the whole story. The fact that you purchase gasoline from a given company does not necessarily mean that the gasoline was actually produced by that particular company’s refineries. While gasoline is sold at about 169,000 retail outlets across the nation1, about one-third of these stations are “unbranded” dealers that may sell gasoline of any brand2. The remainder of the outlets are “branded” stations, but may not necessarily be selling gasoline produced at that company’s refineries. This is because gasoline from different refineries is often combined for shipment by pipeline, and companies owning service stations in the same area may be purchasing gasoline at the same bulk terminal. In that case, the only difference between the gasoline at station X versus the gasoline at station Y may be the small amount of additives that those companies add to the gasoline before it gets to the pump.
- Even if we knew at which company’s refinery the gasoline was produced, the source of the crude oil used at that refinery may vary on a day-to-day basis. Most refiners use a mix of crude oils from various domestic and foreign sources. The mix of crude oils can change based on the relative cost and availability of crude oil from different sources.
Can consumers reduce the revenues flowing to a certain country or countries by boycotting companies that have a history of importing from those countries?
Due to the global nature of the oil market, boycotts by individual consumers or even individual countries cannot reduce the oil revenues of a given oil producing country/countries. At best, consumer boycotts of a company known to import crude oil would result in a temporary reduction in the market share of that particular company. Because the overall consumer demand for products made from oil (like gasoline and diesel fuel) would be unchanged, the oil would simply be purchased by some other company.
Similar market shifts would occur if an entire country or countries refused to buy oil from a certain country/region, or were legally prevented from doing so. The boycotting countries would take additional imports from different countries, and those countries would purchase additional supplies from the boycotted country/region. Due to the nature of the world oil market, it is impossible to impact the oil revenues flowing to a given country or region with anything short of a sanctions regime, wherein all countries pledge to avoid buying from a particular country.