Gas boycotts are not the answer

Resident says gas boycott won't do anything to lower gas prices in Revelstoke.

Editor,

Re: Let’s fix our brightest tourist signs, Letters, Oct. 9

I agree that our high gasoline prices are having a negative effect on our city. I notice it mentioned regularly on Twitter and I hear it in conversations but the age-old solution of a boycott has never worked and never will.

You have to look at the current cause of the issue – Costco in Kamloops. Costco’s goal is to offer gasoline for one cent less than its competitors. The major oil companies, fearing volume erosion, match whatever price they put out. The price keeps going down, well below cost, until Costco resets the price higher and the whole process starts again. Generally, the further you get from Costco, the higher the price (Golden 1.419). The oil companies need to make up for the loss of margin somewhere so the outlying communities pay more. Kamloops wins, Golden loses. Let’s remember that the Costco effect extends to more than just fuel; I pay 78 per cent more for my medications here in Revelstoke. Gas is only 12 per cent higher.

Now to the solution. People are not going to drive less, so boycotts just move the volume around. We have four choices:

1. Encourage Costco or Walmart to set up in Revelstoke with a gas offering (political suicide).

2. Set up large storage tanks and buy in volume and avoid the retail margins like the city did (impractical for consumers).

3. Ask the oil companies to take their signs down. (The price signs actually get special treatment in the sign bylaw.)

4. Support the only independent gas retailer left in Revelstoke.

Most independents get forced out by predatory pricing practices of their larger competitors. The store in the Big Eddy has survived on low margins (losses if you include credit card charges) for many years by keeping overhead low and diversification of his offering. I operated that store for one year and even though its volume is a fraction of the volume sold in the rest of the city it can be the price leader for the entire city. (In the spirit of full disclosure, I supply wholesale gasoline to the mentioned store). The owner works the front counter and receives feedback from every customer that passes through the door but why should he have to carry the entire weight of the tourist industry on his shoulders? The fuel industry is highly competitive so why shouldn’t he be able to maximize his profit like every other business? No one is calling for the boycott of any other business in Revelstoke.

The most efficient economic outcome would be to have the independent sell gas at cost and then be compensated for his loss of profit.  (again political suicide). The other option is the opposite to common boycott approach. Overwhelm the independent retailer with your business. Make a pledge to him: “Here is my business. I will support you with my purchases in good times and in bad if you support me with lower pricing.” The retailer is better off because he sells more in store items and his fuel profits stay the same because he sells more volume but at a lower margin. The key is to continue to support him even after the big oil companies drop their pricing to match his.

We need to support and encourage all local business, not organize boycotts.

Peter Humphreys,

Revelstoke

 

 

 

 

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Interior Health reports three additional COVID-19 cases in region

The number of cases in the region since the beginning of the pandemic are now at 492

COVID-19 minimizes Okanagan Regional Library budget increase

Library adapts to pandemic fiscal disruptions

Interior Health continues to tackle COVID-19

IH president Susan Brown says don’t become complacent about pandemic

Conservative opposition critic tours through Kootenay riding on listening tour

Pierre Poilievre, the Tory finance critic, gathering local feedback on pandemic supports, recovery issues

Liam’s Lowdown: Food is everywhere

Turn your garden scraps into tasty treats

3 new deaths due to COVID-19 in B.C., 139 new cases

B.C. confirms 40 ‘historic cases,’ as well

Stranger in truck grabs boy walking home from school in Kelowna

The 11-year-old boy escaped the incident, RCMP are investigating

Supreme Court Justice Ruth Bader Ginsburg dies at 87

The court’s second female justice, died Friday at her home in Washington

‘This is a very difficult sentencing’; Judge delays Okanagan manslaughter trial to next week

The courts heard Friday that Bourque “did not intend to cause harm” but that her actions were “reckless”

Emaciated grizzly found dead on central B.C. coast as low salmon count sparks concern

Grizzly was found on Gwa’sala-‘Nakwaxda’xw territory in Smith Inlet, 60K north of Port Hardy

VIDEO: B.C. to launch mouth-rinse COVID-19 test for kids

Test involves swishing and gargling saline in mouth and no deep-nasal swab

Young Canadians have curtailed vaping during pandemic, survey finds

The survey funded by Heart & Stroke also found the decrease in vaping frequency is most notable in British Columbia and Ontario

B.C. teachers file Labour Relations Board application over COVID-19 classroom concerns

The application comes as B.C.’s second week of the new school year comes to a close

CHARTS: Beyond Metro Vancouver, COVID-19 cases in B.C. haven’t increased much recently

COVID-19 case counts outside of Metro Vancouver have been level since July

Most Read