Gas Prices

[fluffy]

I'm having some trouble connecting the dots between the prices soaring at pumps here at home and Putin's aggression in Ukraine. Most of our gasoline in BC is domestically produced, either in Alberta or at one of two refineries here in BC. Now I don't think these producers have suddenly seen a thirty percent increase in their cost of production so that leaves us with "market forces". With the potential loss of Russian petroleum from the world market either through sanctions or through disruption of the supply chains that run through Ukraine demand for the world's remaining supply has gone up, and hence the price increase. While the oil we have in Canada has not suddenly become more expensive to produce, prices have responded to this mess on the other side of the world due to the almighty "market forces". I'm struggling to find a reason that Canadian producers are charging Canadian consumers more for a Canadian product and all I can come up with is "Because they can".

[Phil Intheblank]

Cue the usual: We still import from several international sources to our eastern and our most populous central regions; We need Energy East . . ..

And of course Jason Kenney points a finger at 'Trudeau'.

While he promises a plan for a gas price reduction in Alberta.

https://calgaryherald.com/news/local-ne ... ice-kenney

[fluffy]

And of course Jason Kenney points a finger at 'Trudeau'.

While he promises a plan for a gas price reduction in Alberta.

I'm not holding my breath on that one, big oil has him in their collective pocket. Really, when you take an objective look at the situation the only thing that has changed for western Canada oil producers is that with the unrest in Europe there is an opportunity here for greater profit.

I'll wait to hear from the usual suspects who constantly harp on "everything the oil companies have done for Alberta" to chime in here, and explain to me why this isn't simply a cash grab at the consumers' expense.

[m20]

If Canadian oil producers were to sell their product in Canada below market , not only would shareholders (owners) of these companies have the board removed but I suspect Canada would be in hot water for violating trade agreements.

[fluffy]

If Canadian oil producers were to sell their product in Canada below market , not only would shareholders (owners) of these companies have the board removed but I suspect Canada would be in hot water for violating trade agreements.

Which is to say that the consumers' only function in this exercise is to open their wallets wider for the sake of big oil and their shareholders ? This makes a pretty solid case for increased market regulation.

[GordonH]

All domestic or foreign oil sales & purchases are done in US currency, 2 former country leaders wanted to go back to gold standard. They were taken out
US continues to have a monopoly on buying & selling of crude oil.

[fluffy]

US continues to have a monopoly on buying & selling of crude oil.

But does that control extend into what the prices that Canadian producers charge in Canadian markets ? My point is that there is little justification for a domestic price hike when domestic supply and demand are unchanged, other than the profit motive. It's more than a little self-serving when you take into account that they're the first to the trough when the government money is flowing.

[m20]

I burn plenty of gas but I also understand if oil producers were forced to sell below market, investment in the industry would cease, production would cease and we would be dependant upon imported oil.

[my5cents]

We are very complacent regarding the price of gas and other things....

The raw material, comes from Canadian ground. It is priced according to the world price. We are taxed as a percentage of the cost of the gas.

I'm not saying petroleum products should be given away in Canada, but wouldn't it be realistic that since the raw material is locally sourced and obtained from Canadian ground, it could be a reasonable steady price ?

Does the father who is a barber charge his children the same price for a haircut as he does the public ?

Now, the pollution, and the wear and tear on our roadways is caused by the amount of gas we use. If we have a gas guzzler we put out more pollution. If we travel a lot we wear out more highways, if our vehicle is very heavy it burns more fuel and does more wear and tear to our highways.

You'll notice all those factors involve the AMOUNT of gas. So if I use a 100 liters of gas I pollute a certain amount and wear out a certain amount of highway. It doesn't matter if that 100 liters of gas costs $100 or $200, I do the same amount of "damage".

So why are the taxes on petroleum products based on the cost and not the quantity ?

Actually the same principle applies to property tax. We pay on the assessed value of a home. Shouldn't the size of a home (square footage) - for fire protection, road frontage for road maintenance, etc be the basis for the cost to service a home ? What has the value got to do with those costs ?

[fluffy]

I burn plenty of gas but I also understand if oil producers were forced to sell below market, investment in the industry would cease, production would cease and we would be dependant upon imported oil.

But why does domestic market value have to be tied to the global market price ? We already pay more for gas than many other locations in the world, the US for one, what you are saying about global market value doesn't quite cut it. My question is simple, what has changed in Canada that justifies these price hikes ?

[seewood]

We already pay more for gas than many other locations in the world, the US for one, what you are saying about global market value doesn't quite cut it. My question is simple, what has changed in Canada that justifies these price hikes ?

European gas prices are very expensive. Not many F150 grocery getters there.

My take is Oil is a commodity and it trades at world prices. Canada mines gold, but why do we pay world prices if we want to buy a shiny coin. Lumber? Again a commodity, BC was awash in logs and lumber but we see a pretty hefty price for a SPF 2X4.

Egypt subsidizes fuel prices for example to keep them artificially low . They purchase oil on the open market and when it goes up, the subsidies have to go up, damn near bankrupting the country, or raise the price of gas and deal with the ensuing riots.
We produce oil, but do not refine enough for the domestic market, especially here in BC. Most of the lower mainland's fuel comes up from Cherry Point after the refinery refines Alberta crude delivered via the existing TMX and tanker.

What I don't get and figure it is just greed, but the gas stations tanks are 3/4 full of gas delivered last week at one price then this week the same gas is $0.20 more, same fuel...

[my5cents]

But why does domestic market value have to be tied to the global market price ? We already pay more for gas than many other locations in the world, the US for one, what you are saying about global market value doesn't quite cut it. My question is simple, what has changed in Canada that justifies these price hikes ?

Pretty simple. Nothing except the world price, meaning they can afford to cut prices and sell locally and still make a heft profit. This is the industry crying crocodile tears about how they were loosing money and we should help them when a barrel of oil was almost worthless.

...and the politicians.... shrug their shoulders hold there hands out, palms up, "gee we can't figure what we can do",,, so they do nothing and have done so for decades.

They know as the price goes up, their "cut" goes up as well. Why fix it ?

Why should it be fixed ? Because fuel prices cost us throughout our economy. It's a major contributing factor to inflation, something the government gives lip service that they want to fix, but sit on their hands.

Now if there was some loop hole in a tax regulation that caused the government to start collection millions less in taxes for something,,, just how long would it take to fix ?

[Babba_not_Gump]

How painful are gas prices to many people?

Really now, if it's hurting to fill the tank why aren't more people slowing down on the highways, to at least the posted maximum speed?

I just came back from a drive, Kamloops to almost Vernon.
On the TCH the posted speed is 100. I had my cruise set at 98 and everyone was passing me, and not slowly either. As well, I didn't gain on any other vehicles.

Same situation on 97.
Posted speed is 90. I was driving between 90 and 95 and ended up pulling over 4 or 5 times to let those impatient ones go by.
And still never gained on any traffic.

I realize some are hurting, so how about changing your driving habits?

[fluffy]

We produce oil, but do not refine enough for the domestic market, especially here in BC. Most of the lower mainland's fuel comes up from Cherry Point after the refinery refines Alberta crude delivered via the existing TMX and tanker.

That's not true, we produce more than we use nationally. Our problem is mobility within the country, we can't get the stuff from the west where we have more than we need, to the east where they depend on imports from outside the country. 75% of Alberta's oil production goes to the US. In BC we import only 10% of our provincial supply from Washington state, again due to pipelines running at capacity and the gas-thirsty nature of the lower mainland. The bulk of our gasoline supply comes either from Edmonton or from one of our own two refineries in Prince George and Burnaby.

[fluffy]

I'm not crystal clear on the mechanisms, but don't we have regulatory oversight for things like electricity and natural gas ? Why not gasoline ? Now, I get that gasoline is seen by many as an environmental bad guy, and that a government concerned with climate change and GHG emissions won't be terribly disappointed to see a disincentive like high gasoline prices thrown into the mix, but that's neither here nor there. My point here is that what we are seeing is basically corporate greed latching onto a rather limp excuse to get their claws a little deeper into our pockets. Domestic conditions like supply, demand and cost of production have not changed, so what real justification for a twenty or thirty percent price increase is there ?