Chain Letter: How to Drive Petrol Prices Down

Oil Price

Recently, I have been receiving e-mails on how to drive petrol prices down. There are a number of variations of the e-mail. The first one is about boycotting the big players like ESSO/MOBIL, SHELL, PROJET and opt for the so-called small players like CALTEX and PETRONAS. This way, we can make the big companies bleed, and thus bringing petrol prices down. This idea supposedly came from people from PETRONAS. They regard this idea as “price control”. This idea was also supported by somebody that goes by the name of Phillip Hollsworth (try google-ing this name, and you won’t even find a trace of this bugger).

The second e-mail variation is about boycotting petrol as a whole for a certain period of time.

Now in this article, I’ll explain to you why not in a million years these concepts will work. By the way, I’ll be using the words fuel and oil interchangeably.

Firstly, we need to understand that fuel is a necessity (need) and not a luxury (want). At this day of age, it is impossible to go through your day without encountering fuel or fuel-induced goods and services.

Also, we are talking about boycotting from the consumers’ end that utilises cars and motorcycles. Quoting from the blog of a friend of mine, Wei Hao, he said, “do you know how much fuel an airplane burns with a single engine?” So, boycotting fuel means the need to boycott Air Asia, Malaysia Airlines and not to forget Proton and Perodua, our very own makers of machines that use fuel. Let these companies suffer and go belly up. Let our government loses its tax revenue from these companies and go belly up as well. Boycotting fuel is the same as condemning the whole economy. Well, who cares right? As long as we are able to drive oil prices down.

Talking about boycotting, let’s talk about an issue that was “hot” barely a year ago in Malaysia. The issue on Starbucks being an Israel symphatiser. This was during the Lebanon-Israel conflict. There were rumours about boycotting Starbucks for channeling their money to Israel. What ever happened to that? As far as I know, Starbucks’ stores in Malaysia are still going strong, with more Malaysian frequenting Starbucks than ever. Now, if we can’t even boycott coffee, which is a luxury, how can we boycott necessities like fuel?

It’s also like wanting to boycott rice, or minyak masak (cooking oil), or tepung (flour). Malaysian’s news network are always flooded with news on prices of these items going through the roof. Anyone willing to boycott rice, minyak, tepung, gula (sugar), and garam (salt) ?

In fact, if we do decide to boycott fuel, then we pretty much need to boycott rice, tepung, garam, gula, and minyak masak as well. Why? Well, think about it. How do you think these goods get transported to grocery stores in the first place? By trucks? By shipping containers? What do these modes of transport use then? Firewoods? Steam engines? Hell no. They use fuel! Starting from tomorrow, let’s boycott store-bought food. Now, let’s rear our own chickens, cows, ducks, and grow our own vegetables, and paddy fields. And remember, to acquire seeds and offsprings of the stated vegetables and animals, don’t use your cars. Because cars use fuel!

Talking about fuel, we also have to talk about electricity. Electricity power grids also require energies such as fuel. Anyone for boycotting Tenaga Nasional Berhad (TNB)? Nope, didn’t think so.

Fuel is the backbone of any country, no one can doubt that. Nearly every industries, if not all, require the service of the so-called Black Gold. Like I said before, boycotting fuel is the same as condemning the whole economy.

Not convinced yet on why boycotting does not work? Read on folks.

Companies like Exxon-Mobil, Shell, and Woodside Petroleum are companies that are well-established and well-diversified. These companies can go years on end without recording any profits. 5 to 10 years may be. Or even longer than that. Apart from cash reserves that they have, they also delve in other industries. They will be able to survive without the revenues from a minuscule of people not purchasing fuel from them, but the question is, can we survive without fuel for even 1 day?

A company called Golden State Foods is winding up in Malaysia after recording net losses for 5 to 6 years. Golden State Foods is not as big as those gargantuan fuel companies we are talking about and yet they are able to survive for so long. Now, logic tells me, can’t a bigger player survive much longer?

The e-mail also supposedly came from somebody in PETRONAS. They said, don’t purchase from the big players, but purchase from smaller companies like PETRONAS. Hahaha. Udang di sebalik batu anyone?

And don’t tell me about PETRONAS being a small company. They’re listed in the list of Fortune’s Global 500 companies for heaven’s sake!

Another issue to consider. Oil price is driven by supply and demand. Everybody agrees with this little fact.

Say, people did unite and boycott these fuel companies, driving demand down. These companies will respond by constricting supply, thus creating a balance in supply and demand to maintain the high price.

Remember, oil is not like biscuits that have expiry dates. They can cut oil supply, and keep those oil drums in storage until it’s time to flood the market again.

So, the question again. Can the human race survive without fuel?

What can we learn from this issue? Two things really. First, boycotting oil companies won’t work. Second, stop forwarding chain letters. Full stop.

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