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The guy who started that e-mail scam spam about soaring gas prices
Dollar-per-litre rumours are "ludicrous" - industry expert
By: Pat Daley
 Gas price panic is rising. The emails predicting sky-high costs at the pump and calling for consumer boycotts are flying through cyberspace.
Chances are you've seen the one that starts: We heard today from a man who is very savvy about the economy, namely, Clark Howard, and he says that the gas prices are going to start going up again and will be high this summer - $0.82 - and up.
So who the heck is Clark Howard and what does he know about it?
Howard is a U.S. radio show host and consumer advocate. You can read all about him and the Team Clark Howard Consumer Action Center. He denies any connection with a call for gasoline company boycotts.
"A spam email is floating around the country that claims Clark is calling for a national boycott of two major oil companies for the purpose of driving the price of gas down," the website says. "Clark did not write the email message, nor does he favor boycotts."
And how real is the prediction that prices will hit 82¢ or more per litre? Driving around just north of Toronto this week, I saw gas stations posting 81¢. But the idea that it will hit $1 per litre, as some people are suggesting, is "ludricrous," says Calgary-based industry analyst Michael J. Ervin.
"Prices are not likely to go down," he says. As noted in the latest issue of Fuel Fact, published twice a month by Ervin, we're into peak demand season when people do the most driving. "I think any increases will be fairly modest. The balance between supply and demand is already reflected in the latest prices."
If wholesale gasoline prices go much higher, Ervin says, they'll sow the seeds of their own demise. Current prices make it a profitable market, ready to attract refiners from outside North America. Crude oil prices have come down since last year, but gasoline inventories in the U.S. especially are still low. While demand has increased by close to 30% in the last 10 years, the North American refinery infrastructure - and capacity - has remained the same, Ervin says. The combination of low supply and high demand drives prices up.
Judging from the frequent forwarding of those emails, however, it seems a lot of people believe a consumer boycott will help to force prices down. Margaret Gray doesn't think it will work. She owns GasGouge.com, a franchise-type website that local car deals can sponsor for a year and provide consumers with a daily list of gas prices in their local market.
Reader polls on gasgouge.com show that:
61.9% have not been encouraged to trade their vehicle early for a more fuel-efficient one
59% do not ever walk or ride to save gas or for other environmental reasons
57.9% buy gas from the same company all the time because of reward programs.
"I think people just want to see prices reduced," Gray said.
Straight Goods asked Honda Canada spokesperson Jim Miller if rising fuel costs have had any impact on sales of the gas-electric hybrid Insight, which we reviewed here last year. The answer was a blunt "no".
"SUVs are still selling well," he said. "Consumers have gotten inured to gas prices. I don't think anything happens until there's a shortage."
As for Clark Howard, he may not support boycotts, but he does have some advice for people worried about the drain on their pocketbooks:
consider a vehicle that gets better fuel ecomony
shop around - advice echoed by Margaret Gray, who says cheap gas is still quality gas
if you think your car operates better on more expensive premium gas, you probably need an engine adjustment or tune-up.
For help shopping around, there are websites reporting on daily prices at the pumps right across the country. You can find links at GasGouge.com or ottawagasprices.com. To see how your community compares, check out Michael J. Ervin's Fuel Facts at mjervin.com.
Other articles from the Daley dispatches
Posted: May 14, 2001
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