The absurdity of boycotting BP

Doug Mataconis:

The flaw in the boycott movement, of course is that it betrays a misunderstanding of how the oil extraction, gasoline refining, and gasoline distribution businesses actually work. The oil that is extracted by a BP rig may be refined in a refinery owned by a completely different company, and then sold to a wholesaler owned by yet another company, who then sells it to a independent station owner who happens to have a sign that says “BP” at the front of his property. By the time the gasoline gets into the underground tanks at the station, BP has already extracted whatever revenue it was going to make from the entire transaction. By passing that particular station is an economic decision that will never show up on the books of BP or any of it’s subsidiaries.

So, unless you have some particular reason to want to cause economic harm to the small business man who owns your local BP station, that boycott your engaging in has no meaning at all other than making you feel self-righteous.

Comments

[Arthur Acevedo]

I respectfully disagree. A boycott of BP has both economic and non-economic consequences. A consumer who boycotts their local BP station ultimately affects the royalty stream that the station operator must pay BP for the rights to use the BP trademarks. If enough consumers boycott, it could have a material impact. There may also be rent payments due to BP (assuming BP owns and leases the land to the station operator) that get reduced if the sales volume gets affected. Finally, the public relations costs are real. Both in economic and non-economic term . I encourage consumer to boycott.

[Matthew Bilinsky]

Not to mention the fact that at this point, many gas station owners derive the majority of their income from on-site convenience marts, not gas sales. (According a member of the exec board of a major convenience store/gas station trade association)

[will47]

While there's very little gain from boycotting, there's also very little cost to the boycotting consumer. Given that gasoline is pretty much commodified (at least, I don't notice a difference between the performance of BP and the Texaco station across the street), consumers end up making choices on relatively meaningless distinctions.

If the BP brand becomes worthless, I guess eventually its dealers will choose to affiliate with a different corporation, and BP will lose whatever revenue it gets from those dealers, who don't get to hang up the BP sign for free. Because the dealers chose to use the BP name, I don't think it's unfair that they bear some risk that the BP name would become toxic, or that customers would choose, even self-righteously, to avoid BP products.