Questions About Gas Prices
Is it market conditions, or is there collusion when it comes to the price of gas in Prince George as of the weekend?
On Sunday morning , 31 gas stations, (by the way the bulk owned by the five major oil companies in the world) had a price at the pump of 99.9 cents a litre, or $4.54 a gallon. Strangely enough not one single cent difference in a litre among those stations.
As of yesterday afternoon, there were three stations charging less, led by Costco at 88.9 cents a litre or $4.04 a gallon. Super Store, Canadian Tire and two Super Save independents were all a penny a litre more at 89.9.
Now you might get the argument that the US dollar is high and that is how a barrel of oil is priced, so let’s factor that in as well. Price of a barrel of crude on Sunday $48.24, converted to a Canadian dollar, $61.40 a barrel, no where near the $100.00 a barrel cost that brought us prices of $1.30 a litre.
At sixty one bucks a barrel, it just doesn’t add up that we should be paying, essentially, a buck a litre for our fuel, well of course unless there is some price fixing.
For example, if you owned a trucking company and they all got together and decided how much they would charge a mile, how long would it take before the two levels of government would jump in with a charge under the competition act saying there is price fixing going on?
Problem with this one is that one of the big winners in getting a buck a litre is government. Both senior levels of government stand to benefit, price goes up and you pay more in taxes. So does government look the other way? I leave that up to you to decide.
Now there may be people who would suggest that market conditions dictate, but of course you should keep in mind that virtually every person in this province relies in one way or the other on transportation, which is provided with fossil fuel.
So don’t be taken in by the fact that the US dollar is high or the there is some other mysterious reason why the price has suddenly jumped in Prince George, conveniently to one single price, and the Winter Games are just around the corner when demand will be high . Set that all aside, the major oil companies may not be making the kind of money that they would like in the extraction of the product in the tar sands, but they can make up the difference at the pumps and with a spread of 14 cents a litre from what Costco is able to sell the product for and still make a profit, it won’t be long before those losses will be wiped out.
And what of the Province and the federal government? Do you remember them suggesting they will face major deficits as a result of the falling price of a barrel of oil , they have quickly learned that there is more than one way to skin a cat.
Unfortunately you are the cat.
I’m Meisner and that’s one man’s opinion.
Comments
I think its just too bad that Costco can’t buy up a few more gas stations spread around the city and offer gas at their same price but they are not in it to put the other gas stations down, they just want to give their members a fair price. Too bad the other gas companies can’t do the same.
Fairness, isn’t what the big oil companies are all about.
There must be a gas shortage. It is all about supply and demand isn’t it? At least that’s the story with dieseL prices.
Diesel always was and still is, far cheaper to produce than gas. It was historically about one third the cost of gasoline.
When vehicle manufacturers started producing diesel equipped vehicles, the oil companies saw their advantage in increasing the diesel price so that diesel owners couldn’t have an advantage over gasoline powered owners. The trouble was, that the diesel price was across the board, thus affecting most heavy forms of transportation. This alone has really affected prices in everything we have to buy which also, perhaps led indirectly to cheaper foreign made products, which to get here, uses more fuel.
This has been a huge windfall for the oil companies.
They can always increase the demand, thus their prices, by cutting back production in the refineries and squeezing the supply, which they are not adverse to doing.
Business/profit wise, it was a very smart move. Fairness wise, not so much.
In all fairness the oil industry did lose the oil refineries of Karkuk in Iraq this week (source of the cheapest oil on the market) to the American/Saudi/Israeli front called isis. One can assume this is partly a CIA plot to stabilize the price of oil for big oil.
But I think the bigger problem is what Ben alluded to above with the price fixing among the majors at the local level. Clearly this should be investigated by the government, but never will be.
if not collusion then at least here was consultation, conversation, co-ordination and co-operation..
price went up 14 cents so the companies are making ( read) about 14 million a day clear profit..kind of hard to turn down…
and of course our wonderful provincial and federal governments are getting their share so why would they want to lose that free income with an investigation?
Costco is loving it! New membership is up.
Not sure why it took so long for this story about 99.9 cent gas. It has been set at 99.9 cents on all the major stations for better than a week now. It didn’t just happen on this Sunday as suggested.
Thanks for speaking on this subject Ben, as it’s been a craw in my throat for a week now.
The only way all we can make a difference is to keep voicing our opinion(s) and preferably move this up to our MLAs and MPs. It’s a hard row to hoe, but barring setting up road blocks and riots (which we don’t do in Canada) this is our only recourse.
Currently we have made the Province aware of concerns over the hunting licence allotment and I think they will make changes.
Keep up the fight folks, we can make a difference.
Thanks
It’s all about your perspective. I remember when we were all happy when it went under a buck for the first time in a long time. Now that we all feel entitled to 86 cent gas, 99 cents per litre seems like highway robbery. Funny.
As I said a while back, enjoy your cheap fill ups for now. They will not last forever.
Maybe the oil companies are competing for a slice of the $90 million pie the winter games are forecasted to generate.
“As I said a while back, enjoy your cheap fill ups for now. They will not last forever” .. your powers of prediction are astounding. What other products do you envision seeing going up as well?
Huh: “As I said a while back, enjoy your cheap fill ups for now. They will not last forever” .. your powers of prediction are astounding.”
Thanks for the compliment. There are a lot of people who are in denial out there. Look at all the people who are shocked and are complaining at the current gas price.
American/Saudi/Israeli front is ISIS, SAY WHAT? CIA!, where did that come from? Best I have heard yet.
Here is information on diesel pricing and for all fuel prices don’t forget commodity and equity markets, speculators. Prince George is not the only place prices went up.
https://blog.gasbuddy.com/posts/Why-diesel-costs-more/1715-485481-832.aspx
No one is shocked, they are pissed because there is no reason to raise the price.
Huh; I suggest you re- read the story. I am referring to the price on Sunday, not last week or for that matter a week before that.
The old tried and tested method applies, read before you speak.
Give more, The cost to refine diesel has increased due to the ultra low sulpher specifications. More goes into it these days than most think. Hydro treating is required to change the sulpher content to the ultra low specifications. Google it and you will find that diesel costs more to refine. I have never heard of refinery’s cutting production to squeeze the pricein my 34 years in the industry but if an edmonton refinery has a unit shut down be it for scheduled work or unit break down it can drive cost up due to supply and demand.
phje: “No one is shocked, they are pissed because there is no reason to raise the price.”
Why do they feel a need for gas companies to give a justifcation for their prices when they change, when there isn’t the same requirement for anything else you buy? It’s a double standard.
The only way you can stop it is to boycott the higher priced fuel outlets and restrict your driving. I would say even if it takes a little longer to fuel at Costco do it.
I’m all for letting them charge what they want to charge but only once we end the government subsidies.
“Why do they feel a need for gas companies to give a justifcation for their prices when they change, when there isn’t the same requirement for anything else you buy? It’s a double standard.” .. because it is called collusion and price fixing and that is suppose to be illegal, but how can you prove it is price fixing if the gov’t refuses to look into it? How many other products you know of in town that all go up at the same time by the same price the same day by different businesses?
Meisner – I stand by what I said. Why a story a week AFTER gas went up and not when it happened? But your choice I suppose when you want to run a story or opinion, but I don’t need to reread the piece because I understood it the first time. Why mention Sunday at all if it wasn’t to imply gas is NOW 99.9 per litre, why not simply say gas is now at 99.9. Splitting hairs? Maybe, but you don’t seem to have any trouble splitting them as well.
Huh: “because it is called collusion and price fixing and that is suppose to be illegal, but how can you prove it is price fixing if the gov’t refuses to look into it? ”
It probably has something to do with the revenues from taxation to gas, which pay for the cost of government and all the services and infrastructure we take for granted.
Sorry to break it to you, but this has been going on for a very long time, and the chances of government stepping in and regulating gas prices on a regional basis are slim to none.
Like I said earlier, if you want to make a statement, vote with your wallet, drive less, buy a fuel efficient vehicle, etc. Since Costco came to town, it has made a difference from station to station.
I bought a bottle of coke at a Mr G store and it was $2.39. Then I was walking through the 7-11 a couple days later and noticed… $2.39!!! COLLUSION I tell ya!!!
That’s right, keep showing your intelligence, as usual.
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