Clement wants oil industry to explain gas prices

How it sets gas prices easy.
How much can we gouge before the public starts passing "nasty" laws.

Don't like spending lots of money on gas? Don't drive your Hummer a block for a litre of milk.

My Hummer's got pedals.

No seriously, this is a valid issue. For example, some years ago when they actually managed to get an oil exec to talk, they asked why, when the price of oil drops, it takes so long to reflect that decrease at the pumps. The answer made sense, the gas companies purchased so much at X amount, and have to continue selling it at the higher price to avoid a loss.
Problem is, no one bothered with the obvious follow up question; The why the fuck does the price of gas go up within seconds of an oil price hike

The news this morning told us to expect as much as a 6c drop overnight. The arseholes at the local station put it UP 4c this morning.
Gouge as much as you can for as long as you can.

I miss the gas war days. When I was living in Winnipeg, there was a gas war that lasted until one station went so far as to charge only a half cent per litre.
That's when the gov't stepped in and ruined the fun.

Gas wars is an interesting idea and I think it can (theoretically) still work in some respect. For example, if consumers organized to boycott one specific gas company, that company will be forced to lower its gas prices to draw customers back to them. Then other companies may follow suit in order to be competitive, so they'll also lower their prices.

The only problem is consumers will never be that organized...probably because they don't care enough.

Anyway, someone SHOULD be asking these questions. It's not fair that we have to pay over 30% more in some cases compared to the Americans.

Well since "Canada is a Northern European welfare state in the worst sense of the term" that tax money has to come from somewhere. Distribution/economy of scale costs might also be playing out.

This has been tried numerous times and works so well that nothing changes. Let's say you were very successful and manged to drop brand X sales by half for one day. The next day their sales were above normal as when the vehicle gets down to fumes you must fill up again along with all the normal sales. The 7 day average remains unchanged.

The big price difference between us and the Americans is taxes. The average tax in the US is 25 cents per gallon or about 6.5 cents per litre. The lowest tax is Alberta which is about 25 cents per litre including GST. In Ontario with the revised HST the taxes are over 40 cents per litre. Mmmmm a $0.345 spread compared to the US. Is this your 30%?

A reminder that the government's taxes account for a solid chunk of what you pay for at the pump (80% of pricing is not related to corporate markups, marketing programs, station pricing etc). We have to keep in mind that not 100% of what we are paying is actually what it cost to make, and that there are various mark-ups in price along the way.

Spring is when you see a lot more people begin driving, pushing up demand. Likewise, spring is also when a lot of refinery maintenance begins, and the amount of gasoline actually available on the market depends heavily on refinery capacity to produce the gasoline you need. While generally we can get a good idea on where gasoline will go from crude prices, we have to keep in mind that gasoline goes through a different creation, supply and demand process than crude itself -- those prices may heavily influence trends, but are not the only things involved.

Even if world inventories and production were holding at a level to keep prices down, it would inevitably have to come through the bottlenecks present in the refining and distribution process and would also depend a lot on seasonal factors.

Likewise, even though oil prices appear to be dropping, it is more lucrative to send oil and gasoline to places where the prices are higher, so as to make more profit. Oil can be transported, and sending it to other nations is one of the chief ways that Canada, and the Canadian government, make money to support ourselves. It should, hence, not be a surprise that if domestic markets appear to be disappointing, Canadian production may be routed to trading partners. Luckily for us, there are benefits to keeping it local (don't have to pay transport, or tarriffs) so Canadians can still enjoy a lower price than most countries get (like in Europe).

Regional markets can change a bit more abruptly than the international one. I think that the journalists involved here "forget" that this is an easy news story to cover, and has been for thirty years, as prices rise when summer approaches. It's worth keeping an eye on to see whether or not it matches trends or if anything else we should know about is going on, but I don't think claims of gouging can come forth quite yet. I'm sure that the reason Clement is jumping on it is because of it's political importance (Canadians do care) and getting information out there makes them appear proactive in understanding why this particular rise is occurring (not a negative, as it is their job, sorry if this was worded badly).

Just my opinion!

- Shell

- PetroCanada

- Imperial Oil (ESSO)

Any more information than that is not really for the public domain. If you (or he) wants a more complete financial breakdown, they can always access the financials of these companies...which are available to every shareholder. I'm not quite sure, but I think they can also be found easliy in the public domain.

Here's a question...they want to control everything about oil today....when do they get to my industry? Will I have to have my profit margins approved by the government?

If people really don't like the price of gas, do what I do...minimize demand.

Right on. But you're sorta pissing in the wind. For every little drop in demand that comes from you, there's a 1000 Asian just dying to use half as much as you are. Gas ain't going anywhere but up.

Ah, so you mean another oligarchy should horde it for themselves while the masses have ration the precious few scraps they get from their "benefactors." Lovely.