I buy a dozen of eggs for Rs. 10. Every morning I eat two eggs for breakfast. Since a dozen eggs won't last for a week I normally buy two dozen at a time. One day while buying eggs I noticed the price rose to Rs.15 a dozen. In few weeks it rose to Rs.30 a dozen. When asked to explain the price of eggs the store owner said, "The price has gone up and I have to raise my price accordingly". These stores buy over 100 dozen eggs a day. I checked around for a better price and all the stores have raised their prices. The distributors buy from huge egg farms as 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 so on. As I kept buying eggs the price kept going up. I saw the big egg trucks delivering 100 dozen eggs each day. Nothing changed there. I 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. At the end of the year, the price of eggs shot up to Rs.35 a dozen. Again I asked the grocery owner why and was told, "Cakes and baking for the Christmas and New Year". The huge egg farmers knew there will be a lot of baking going on and more eggs would be used. Hence, the price of eggs shot up.
This pattern continued until the price of eggs is Rs.40 a dozen. I started talking to all the people in my neighborhood and we decided to stop buying eggs. This didn't work because everyone needed eggs. Finally, I suggested that we must buy what we need. I ate one egg a day. On the way home from work I would stop at the grocery and buy just 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 filling up at his warehouse. He told the huge egg farms that he didn’t have any room for eggs and 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 by few rupees. 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 started buying by dozens again.
Now, transpose this analogy to the Petroleum industry. What if everyone bought only half or less than half the vehicle tank capacity each time? The dealer's tanks would stay semi full all the time. The dealers wouldn't have room for the fuel coming from the huge tanks. The tank go-downs wouldn’t have room for the fuel coming from the refining plants. And the refining plants wouldn't have room for the oil being offloaded from the huge tankers coming from the oil fields. Don't fill up the whole fuel tank of your vehicle. You may have to stop for fuel twice a week but, the price should come down. Think about it. Also, when you buy fuel for a higher price and fill up the whole tank, you may not have room for fuel coming for lesser price later, when more and more people join this campaign. Also, don't buy anything else at the petrol station until the prices come down. Suggest ways to spread this campaign.
This pattern continued until the price of eggs is Rs.40 a dozen. I started talking to all the people in my neighborhood and we decided to stop buying eggs. This didn't work because everyone needed eggs. Finally, I suggested that we must buy what we need. I ate one egg a day. On the way home from work I would stop at the grocery and buy just 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 filling up at his warehouse. He told the huge egg farms that he didn’t have any room for eggs and 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 by few rupees. 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 started buying by dozens again.
Now, transpose this analogy to the Petroleum industry. What if everyone bought only half or less than half the vehicle tank capacity each time? The dealer's tanks would stay semi full all the time. The dealers wouldn't have room for the fuel coming from the huge tanks. The tank go-downs wouldn’t have room for the fuel coming from the refining plants. And the refining plants wouldn't have room for the oil being offloaded from the huge tankers coming from the oil fields. Don't fill up the whole fuel tank of your vehicle. You may have to stop for fuel twice a week but, the price should come down. Think about it. Also, when you buy fuel for a higher price and fill up the whole tank, you may not have room for fuel coming for lesser price later, when more and more people join this campaign. Also, don't buy anything else at the petrol station until the prices come down. Suggest ways to spread this campaign.
