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Wednesday, March 22, 2006
Gasoline Pricing Re-Revisited
If the gasoline refiners and the major oil companies are such dirty rotten monopolist capitalist pigs, what happened to their market power in February? In Canada,
Lower gasoline prices helped push Canada's annual rate of inflation down to 2.2 per cent in February, Statistics Canada said Thursday. The government agency says the price of gasoline dipped 6.8 per cent in February — pushing inflation down from January's 2.8 per cent.
[h/t to Canadian Econoview]
Posted by EclectEcon on March 22, 2006 | Permalink
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Comments
Yeah, well oil is down to between $60-$62/ barrel, and gas is up to 94.9/l here in central/northern Alta....makes no sense.
Posted by: MarkAlta | 2006-03-22 10:10:09 PM
and how is the price of electricity in Alberta? still at an all time high. Like many other prices in Alberta.
Posted by: James | 2006-03-22 10:24:53 PM
Mike Jenkinson had an article on that in the SUN last year, asking if it was a sign of collusion that all the gas stations in Edmonton dropped their prices AT THE EXACT SAME TIME.
Posted by: Feynman and Coulter's Love Child | 2006-03-23 3:33:37 AM
Aliens delivered a gas price fixing formula to the CIA in Roswell New Mexico. That's why there's a coverup.
Posted by: infidel | 2006-03-23 7:21:55 AM
When I worked at a gas station as a teenager, the manager had to drive around and mark down the prices at all the competing gas stations and call them in all the time. If the price changed abruptly at one of them, a call was made (presumably to a regional office) where they decided the change.
This isn't collusion, it's competition.
Posted by: Warwick | 2006-03-23 8:01:26 AM
How can the price be 94.9 in Alberta when it's 1.004 in Montreal QC? Alberta has no provincial taxes and QC has the highest taxes in the world? Surely there's more than a nickel difference in taxes?
Posted by: Maple stump | 2006-03-23 8:03:29 AM
Since Ontarians see conspiracies against them at every turn, the difference between collusion and competition is not important to them.
They see rising gas prices as an Alberta plot to extort money out of them. Whenever prices rise, Ontarians say with one voice how Alberta should be plundered dry as compensation. The simple fact that most Ontarians drive big expensive cars does not seem to bother them.
No wonder their fascist state is dying. As much as I like seeing Ontario suffer, the best part is that I don't have to do anything.
Posted by: Scott | 2006-03-23 8:04:51 AM
Maple Stump,
Alberta has no Provincial SALES tax. They have taxes on Gas as well as liquer, etc.
Posted by: Warwick | 2006-03-23 8:14:37 AM
It may be competition, but consumers are being ripped off. The oil companies are as close to a monopoly as you can get without actually being one.
Posted by: MarkAlta | 2006-03-23 8:34:34 AM
Maple Stump, Alberta Premiere Peter Lougheed cut a deal with PM Pierre Trudeau to sell Alberta Oil & Gas to the other Provinces at 25% below world market price. This allowed Alberta to have 75% of it's own Energy Resource Revenue. Up until this deal, Ottawa was totally raping Alberta's resources.
Posted by: Speller | 2006-03-23 8:46:50 AM
MarkAlta,
If the Oil companies are acting like monopolists, explain why a bottle of water costs $1.50 and a litre of gas costs less than a buck - and most of that is tax.
Oil is a commodity. It's price is set on the world markets - not in an office in Calgary.
Idiots like Hugo Chavez, the thug in Nigeria, the mullas in Iran, the crooks in Saudi Arabia all get to make the commodity more expensive. Alberta benefits from this price increase (as does the Feds, as does everyone who owns stock in oil companies. Anyone have a mutual fund, pension fund, etc.? Chances are you own the oil companies you're bitching about.)
But the reverse is also true. When oil was under $20 bbl, no lefties were crabbing about Alberta and the oil companies not making enough money were they? Oil is cyclical. They have good times and bad times. I don't want to subsidize this industry in the bad times, I can't be expected to be enriched by these companies in the good times (except through ownership of shares purchased on the public exchanges where warranted.)
Pick another scapegoat for your envy. If you find it too expensive to fill up your hummer, buy a civic hybrid and stop complaining.
Posted by: Warwick | 2006-03-23 9:35:58 AM
I have no statistics yet to back this up but what I have noticed is that there seems to be a disconnect between the price of oil and the price of gas at the pump. Back when oil was in the 20 to 30 $/Bbl gas seemed to range from the mid 60's to mid 70's cents per litre. With oil now consistently trading at about 2.5 times that rate I would think that fuel prices should be higher than they are, based on previous ratios.
If what we are paying is fair price now, then it would seem that we were being bilked previously.
Posted by: ward | 2006-03-23 11:22:33 AM
Your ratio needs to net out taxes (the largest factor,) refining costs, marketing costs, and overhead (all those corner lots at major interestions.)
Oil costs are the fluctuating part of the equation. If 60% of your costs are static, your delta will be less steep than if you had less fixed costs.
Posted by: Warwick | 2006-03-23 11:26:22 AM
Warwick: I am not envious, merely ticked off. I realize that no company in Calgary sets the price of oil. However, the big oil companies are very quick to raise the prices at the pumps for any possible thing (cold weather predicted, rise in terrorist attacks, etc.)
There is no equal and opposite reduction in price when things are going smooth, and they have a surplus of supply. I'm sure if you wanted to go after the water bottling companies you would have reason, however I don't put bottles of water in my "mini-van", not a hummer thank you. Stick your 'civic'-minded comments... :)
Posted by: MarkAlta | 2006-03-23 4:46:42 PM
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