1-day gas boycott won't make prices fall, analyst says

Consumers frustrated with the cost of gas have launched an online campaign urging others to boycott gas stations on Tuesday, a movement that analysts say will not likely force prices to drop.

'What's driving gasoline prices is not consumers' opinion about them it's the imbalance between supply and demand for gasoline.' Catherine Hay, MJ Ervin & Associates

An e-mail circulating in Canada and the U.S. urges consumers to hold off topping up their fuel on May 15 in an effort to force oil companies to lower their prices. According to the website snopes.com, which explores urban legends, the first boycott was organized in 1999 with several others rolling out since then.

The national average for a litre of gasoline in Canada hasreached $1.149, according to the gas monitoring website gasbuddy.com.

But industry observers say a one-day boycott is largely ineffective, as consumers who participate will either fill up the day before or the day after.

"It has no impact on gasoline prices whatsoever, that's the bottom line," said analyst Catherine Hay, a senior associate at MJ Ervin & Associates. "What's driving gasoline prices is not consumers' opinion about them it's the imbalance between supply and demand for gasoline."

Hay said that consumers who want to bring down prices could take action by simply driving less and buying less gasoline not just for one day but over a longer timeframe.

"The prices that we're seeing are being driven by high demand and very tight gasoline supplies," she said. "Consumers can't impact the production of gasoline so they can't impact the supply side, but they can impact the demand side."

Consumers Association calls for investigation into prices

Earlier this month, the Consumers' Association of Canada called on the federal government to investigate rising gasoline prices.

Bruce Cran, president of theassociation, said motorists need to be protected, noting that they were frustrated with industry explanations of low supply, high demand and refinery problems.

The Competition Bureau has investigated allegations of price collusion several times but found no evidence of wrongdoing.