Friday, August 10, 2012

Possible solution to cut down Petrol prices

Nice Logic - It may Work!! could be one possible solution for petrol prices!!!!

For example, lets assume we eat two eggs each morning for breakfast. When we go to the Grocery store, we pays Rs.30/dozen. Since a dozen eggs won't last for a week, we normally buy two dozens at a time. One day while buying eggs, you may notice that the price has risen to Rs.35. After couple of weeks, eggs are now Rs.40/dozen.

When you ask to the store owner, "Why the prices of eggs are increasing?". He says, "The price has gone up and I have to raise my price accordingly". Whereas this store owner buys 100 dozen eggs each day. When you try to check in nearby store to get better deal, you find that, all the distributors have raised their prices. The distributors buy from the huge egg farms. The huge egg farms sell 1,00,000 dozen eggs each day to these distributors. With no competition, they set the price as per their profit range. The distributors are those who controls the egg prices by stocking in huge number, to the grocery stores. And on and on and on.

As we keep buying eggs the price keep on going up.

Then week before Diwali the price of eggs shot up to Rs.50/dozen. Again you ask the grocery owner why and he tells, "Cakes and baking for the holiday". The huge egg farmers know there will be a lot of baking going on and more eggs will be used. Hence, the price of eggs goes up. Expect the same thing at Christmas and other times when family cooking, baking, etc. happen.

You can see that, this pattern is continuing until the price of eggs is Rs.70/dozen. One day you decide, enough is enough, There must be something I should do about the price of eggs.

You start talking to all neighbors and all decide to stop buying eggs. But it would not work, because everyone needs eggs.

Finally, you come up with an idea and suggest all neighbors to only buy what you need. You eat 2 eggs/day. On the way home from work, you stop at the grocery and buy only two eggs. Everyone in your society or area start buying only 2/3 eggs a day.

The grocery store owner now have too many eggs in his cooler. He asks the distributor that he do not need any eggs.As old stock is still lying in his store.

The distributor has eggs piling up at his warehouse. He asks the huge egg farms that he do not have any room for eggs.

At the egg farm, the chickens just keep on laying the eggs. To relieve the pressure, the huge egg farm asks the distributor that they can buy the eggs at a lower price.

The distributor says, "I don't have the room for the 1,00,000 eggs even if they are free". The distributor asks the grocery store owner that, he will lower the price of the eggs, if the store owner starts buying again.

The grocery store owner says, "I don't have room for more eggs. The customers are only buying 2/3 eggs at a time. Now if you drop the price of eggs back down to the original price, the customers may start buying by the dozen again".

Even after lowered price from Grocery store, You still buy 2/3 eggs at a time.

Slowly the price of eggs may start dropping.

Eventually, the egg farmers have to cut their prices because they are throwing away eggs they couldn't sell.

The distributors starts buying again because the eggs are priced to where the stores could afford to sell them at the lower price.

And the customers starting buying by the dozen again.

Now, transpose this analogy to the Gasoline industry.

What if everyone only buy Rs.200.00 worth of Petrol each time you go to the pump? The dealer's tanks would stay semi-full all the time. The dealers wouldn't have room for the gas coming from the huge tanks. The tank farms wouldn’t have room for the petrol coming from the refining plants. And the refining plants wouldn't have room for the oil being off loaded from the huge tankers coming from the oil fields.

Just Rs 200.00 each time you buy gas. Don't fill up the tank of your car. You may have to stop for gas twice a week, but the price should come down.

Think about it. Also, don't buy anything else at the fuel station; don't give them any more of your hard earned money than what you spend on gas, until the prices come down..."

...just think of this concept for a while.