Gas $139.9

[mpom]

Using a 25% dollar difference, the price per litre in Bellingham (Costco) is about 83 cents per litre. Whats-his-name can shove his 'pacific northwest shortage' where the sun doesn't shine. Ironically, that's Kelowna right now!

[alanjh595]

Most expensive gas in N.A.

And the cost of the liquid gold is expected to rise even more.

The current average in the Lower Mainland is $1.44, but that is expected to break the $1.47 mark this weekend.

The Okanagan is not that far behind, with the pump price coming in at $1.39 despite not having the transit taxes Lower Mainland residents pay on a litre of gas.

GasBuddy analyst Dan McTeague said prices will hopefully top out this weekend.

“It may be a sign that things have finally hit their crest and they will start to recede, perhaps pushing us down towards below the $1.40 mark over the next several days,” he said.

McTeague blames the uptick on a shortage of gasoline in the Pacific Northwest combined with increased demand from a booming American economy.

The days of oil over production are gone and as supplies tighten up, prices rise and McTeague said motorists should expect a general upward trend in gas prices.

According to McTeague, matters are made worse north of the border by the fact that Canada doesn’t produce enough gasoline to meet its own needs. That means the country will have to keep buying from foreign markets that might be setting prices based on a very different set of financial circumstances.

https://www.castanet.net/news/BC/210786 ... gas-in-N-A

[Jonrox]

I'm not venting, simply suggesting that it would be nice if big oil were bound by the same rules of operation that all other businesses are.

The issue lies in the fact that governments benefit hugely from big oil, thus turn a blind eye to things they would otherwise address, were it a small business.

A case of "don't bite the hand that feeds you" so to speak.

This is funny. Big Oil IS bound by the same rules of operation as other businesses, but you’re asking them to be bound by some other set of rules. Other businesses charge prices that the market will bear. That’s what Big Oil is doing. You just don’t like that the rules aren’t different for them.

The problem arises because because people get upset by this so Big Oil has had to come up with reasons for prices that are more palatable to consumers that don’t understand business or economics very well. You don’t like to hear “we charge what we charge because you’ll pay it”. But that’s exactly what Big Oil and every company out there that knows what they’re doing is doing.

You pay much higher margins on almost everything else you buy and do so without complaining. But with gas, everyone thinks they’re all of a sudden some kind of business expert. You don’t understand the skill of analyzing the market and setting your prices based on that without regard to costs.

You have no problem paying Apple and Samsung 300% markup on your cell phone. You happily pay 500% on a lot of the clothes and shoes you buy. And yet you get upset with the gas companies for charging much lower margins. When you start to understand that prices have nothing to do with costs and are in fact set by the market, you’ll stop being so angry about gas prices.

For proof that consumer buying decisions aren’t set by costs, without using Google tell me what the cost to produce of the following items is...

- a Samsung 60” TV
- a can of Campbell’s tomato soup
- a Lazy Boy leather sofa

You don’t care what the costs of those items is and yet you still buy them. The costs are irrelevant in your buying decision, just as the cost to produce gas is irrelevant to your buying decision. Your buying decision is based on whether that item has value at the price the manufacturer decided on. Therefore, the market is setting the price and your buying behavior suggests the price of gas is providing value.

I’ve said it before that most of you are actually getting a good deal on gas whether you want to admit it or not. I’m guessing most of you would pay much higher prices than what we’re currently seeing before you actually change your buying habits. If you don’t change your behavior it’s evidence that you still feel you’re getting good enough value. You can say you’re upset but your behavior is telling Big Oil you’re still quite happy with them and their product.

[rookie314]

Perfect post.

[Urban Cowboy]

@Jonrox - You seem to be overlooking something in your explanation, at least to my thinking.

That's the fact that with the other items you use in your example, the retailers aren't all colluding in backrooms deciding what everyone is going to charge, so don't tell me they are playing by the same rules as other businesses.

Go look at a 60" Samsung TV in various stores around town and chances are you won't find two at the same price, or that can of soup which will be different at Save On, IGA, Nestor's, etc., unlike gas where within minutes everyone in town is changing their signs to the same thing. They may as well all use the same sign and branding for all the good the variety of station names does.

I had a relative who worked for big oil at one time, and part of her job was to call the competition and inform them when prices were set to go up and to what number. Does that sound like behavior all other businesses engage in?

It's that aspect that ticks people off the most. If your scenario were truly applicable then why isn't gas more expensive in the Mission where there's more money, as opposed to say Rutland? Are those just poor station operators losing out on more potential profit in the Mission?

I know at their Petro Can the company forced the former operators out, so head office calls all the shots.

I don't buy for a moment that the gas companies are playing by the same rules as every other business.

[Jonrox]

It’s because people watch gas prices like hawks and will drive across town to save a few pennies.

Although you complain about prices rising together, they also fall together. Yet nobody complains when they “collude” to drop prices.

As well it’s essentially the same commodity across all stations so shouldn’t really be priced all that different across various stations.

[Catri]

There's also the fact that the big oil companies are taking their raw materials directly from our land. I think that exploitation of our natural resources should entitle us to a bit of a break...or at least not to feel violated every time we fill up our cars.

[oneh2obabe]

I had a relative who worked for big oil at one time, and part of her job was to call the competition and inform them when prices were set to go up and to what number. Does that sound like behavior all other businesses engage in?

Not sure about all businesses but the industry I worked in did exactly that. The head honchos of the 3 major players would have a "business lunch" and decide which one would be the first to increase their price. The others would follow within a week of each other. Next price increase would be lead by one of the two who followed the lead the first go round.

[Urban Cowboy]

It’s because people watch gas prices like hawks and will drive across town to save a few pennies.

Although you complain about prices rising together, they also fall together. Yet nobody complains when they “collude” to drop prices.

As well it’s essentially the same commodity across all stations so shouldn’t really be priced all that different across various stations.

I don't know how old you are, but I can tell you that there was a time that the price for gas was different at various stations within a town, but that was back in the 60's.

Stations used to even have gas wars with pricing. How often do you see that these days?

Also much of the complaining stems from big oil treating us like we're stupid.

Case in point if we see the price of a barrel of oil drop say ten bucks for arguments sake, we expect the price at the pump to come down, but when pressed as to why it hasn't, big oil tells us it takes a while for the oil that's already in the system at the old price to be flushed out.

That seems plausible so we buy into it.

Then all of a sudden a pipe breaks somewhere in Louisiana forcing them to temporarily shut something down, and within minutes the price at the pump here shoots up.

So what's the deal the oil only needs time to be flushed out of the system when it means prices going down? You see what I mean?

[maryjane48]

It’s because people watch gas prices like hawks and will drive across town to save a few pennies.

Although you complain about prices rising together, they also fall together. Yet nobody complains when they “collude” to drop prices.

As well it’s essentially the same commodity across all stations so shouldn’t really be priced all that different across various stations.

Your argument is tax payers in canada should pay more than we need to ? Lol how about you pay for everyone anything over what it costs to make a gallon of gas

[Urban Cowboy]

I had a relative who worked for big oil at one time, and part of her job was to call the competition and inform them when prices were set to go up and to what number. Does that sound like behavior all other businesses engage in?

Not sure about all businesses but the industry I worked in did exactly that. The head honchos of the 3 major players would have a "business lunch" and decide which one would be the first to increase their price. The others would follow within a week of each other. Next price increase would be lead by one of the two who followed the lead the first go round.

I don't doubt what you are saying for a moment.

My point is that such conduct is in fact collusion, yet any time they are accused of it they deny it.

[Jonrox]

Also much of the complaining stems from big oil treating us like we're stupid.

Case in point if we see the price of a barrel of oil drop say ten bucks for arguments sake, we expect the price at the pump to come down, but when pressed as to why it hasn't, big oil tells us it takes a while for the oil that's already in the system at the old price to be flushed out.

That seems plausible so we buy into it.

It seems plausible to anyone that doesn’t understand economics and business.

The problem is that people just can’t seem to understand that the price of virtually everything they buy is completely unrelated to the cost to produce it. Prices are set by the market, not by costs. But time and time again this concept is beyond the understanding of most people. Most people aren’t the business geniuses they think they are.

As with almost everything you buy, companies price at a point the market will support. They charge what they do because they can. Costs are completely irrelevant because consumers don’t know what they are and therefore don’t base their buying decision on them. It’s business 101, but most people have zero business experience or are terrible at it. Cost-plus pricing is what companies do when they’re terrible at what they do.

You’ve acknowledged that costs don’t seem to reflect how gas companies price their product, so you just need to accept this fact (and that almost everything you buy is priced in a similar manner). The market is responsible for the price, so blaming the gas companies for your own buying behavior is kind of silly.

They’re just pricing at a point that you see value at and you buy what they’re selling.

[Jonrox]

It’s because people watch gas prices like hawks and will drive across town to save a few pennies.

Although you complain about prices rising together, they also fall together. Yet nobody complains when they “collude” to drop prices.

As well it’s essentially the same commodity across all stations so shouldn’t really be priced all that different across various stations.

Your argument is tax payers in canada should pay more than we need to ? Lol how about you pay for everyone anything over what it costs to make a gallon of gas

I’m really not sure what being a taxpayer has to do with anything.

Nobody is paying more than they need to. If you don’t see value in the price of the good, you don’t need to buy it. If you keep buying, then you’re telling the company producing the good that their price is acceptable.

[Jonrox]

My point is that such conduct is in fact collusion, yet any time they are accused of it they deny it.

The market sets the price of goods. This is a good that’s virtually identical from all companies that sell it. Therefore the prices from all suppliers will gravitate towards each other. It’s the same reason prices also fall at the same time - yet people don’t seem to accuse them of collusion when they all lower their prices.

Competitors discussing general market conditions isn’t collusion. Competitors can talk to each other without it being collusion. It can be, but it isn’t necessarily.

[Urban Cowboy]

My point is that such conduct is in fact collusion, yet any time they are accused of it they deny it.

The market sets the price of goods. This is a good that’s virtually identical from all companies that sell it. Therefore the prices from all suppliers will gravitate towards each other. It’s the same reason prices also fall at the same time - yet people don’t seem to accuse them of collusion when they all lower their prices.

Competitors discussing general market conditions isn’t collusion. Competitors can talk to each other without it being collusion. It can be, but it isn’t necessarily.

Well I admit I'm no lawyer but here's the definition from Websters........

collusion - secret agreement or cooperation especially for an illegal or deceitful purpose

I would say that contacting each other to set prices at the pump, would qualify as a secret agreement or at the very least cooperation.

How would you define it?