This is a rather lengthy story but if the concept is applied to
the petroleum industry en masse , it just may work.
A man eats two eggs each morning for breakfast. When he goes to the
grocery store he pays 60 cents a dozen. Since a dozen eggs won't
last a week he normally buys two dozens at a time.
One day while buying eggs he notices that the price has risen to 72
cents. The next time he buys groceries, eggs are 76 cents a
dozen.
When asked to explain the price of eggs the store owner says, "The
price has gone up and I have to raise my price accordingly".
This store buys 100 dozen eggs a day. He checked around for a
better price and all the distributors have raised their
prices.
The distributors have begun to buy from the huge egg farms. The
small egg farms have been driven out of business. The huge egg
farms sell 100,000 dozen eggs a day to distributors. With no
competition, they can set the price as they see fit. The
distributors then have to raise their prices to the grocery stores.
And on and on and on.
As the man kept buying eggs the price kept going up. He saw the big
egg trucks delivering 100 dozen eggs each day. Nothing changed
there. He checked out the huge egg farms and found they were
selling 100,000 dozen eggs to the distributors daily. Nothing had
changed but the price of eggs.
Then week before Thanksgiving the price of eggs shot up to $1.00 a
dozen. Again he asked the grocery owner why and was told, "Cakes
and baking for the holiday". The huge egg farmers know there will
be a lot of baking going on and more eggs will be used. Hence, the
price of eggs goes up. Expect the same thing at Christmas and other
times when family cooking, baking, etc. happen.
This pattern continues until the price of eggs is 2.00 a dozen. The
man says, " There must be something we can do about the price of
eggs".
He starts talking to all the people in his town and they decide to
stop buying eggs. This didn't work because everyone needed
eggs.
Finally, the man suggested only buying what you need. He ate 2 eggs
a day. On the way home from work he would stop at the grocery and
buy two eggs. Everyone in town started buying 2 or 3 eggs a
day.
The grocery store owner began complaining that he had too many eggs
in his cooler. He told the distributor that he didn't need any
eggs. Maybe wouldn't need any all week.
The distributor had eggs piling up at his warehouse. He told the
huge egg farms that he didn't have any room for eggs would
not need any for at least two weeks.
At the egg farm, the chickens just kept on laying eggs. To relieve
the pressure, the huge egg farm told the distributor that they
could buy the eggs at a lower price.
The distributor said, " I don't have the room for the
%$&^*&% eggs even if they were free". The distributor told
the grocery store owner that he would lower the price of the eggs
if the store would start buying again.
The grocery store owner said, "I don't have room for more eggs. The
customers are only buying 2 or 3 eggs at a time. Now if you were to
drop the price of eggs back down to the original price, the
customers would start buying by the dozen again".
The distributors sent that proposal to the huge egg farmers but the
egg farmers liked the price they were getting for their eggs but,
those chickens just kept on laying. Finally, the egg farmers
lowered the price of their eggs. But only a few cents.
The customers still bought 2 or 3 eggs at a time. They said, "when
the price of eggs gets down to where it was before, we will start
buying by the dozen."
Slowly the price of eggs started dropping. The distributors had to
slash their prices to make room for the eggs coming from the egg
farmers.
The egg farmers cut their prices because the distributors wouldn't
buy at a higher price than they were selling eggs for. Anyway, they
had full warehouses and wouldn't need eggs for quite a while.
And those chickens kept on laying.
Eventually, the egg farmers cut their prices because they were
throwing away eggs they couldn't sell.
The distributors started buying again because the eggs were priced
to where the stores could afford to sell them at the lower
price.
And the customers starting buying by the dozen again.
Now, transpose this analogy to the gasoline industry.
What if everyone only bought $10.00 worth of gas each time they
pulled to the pump? The dealer's tanks would stay semi full all the
time. The dealers wouldn't have room for the gas coming from the
huge tank farms. The tank farms wouldn't have room for the gas
coming from the refining plants. And the refining plants wouldn't
have room for the oil being off loaded from the huge tankers coming
from the oil fiends.
Just $10.00 each time you buy gas. Don't fill it up. You may have
to stop for gas twice a week but, the price should come
down.
Think about it.
As an added note...When I buy $10.00 worth of gas that leaves my
tank a little under quarter full. The way prices are jumping
around, you can buy gas for $2.65 a gallon and then the next
morning it can be $2.15. If you have your tank full of $2.65 gas
you don't have room for the $2.15 gas. You might not understand the
economics of only buying two eggs at a time but, you can't buy
cheaper gas if your tank is full of the high priced stuff.
Also, don't buy anything else at the gas station; don't give them
any more of your hard earned money than what you spend on gas,
until the prices come down..."
..................please pass this concept around....reaching out
to the mass..the world ...the universe
