MadMonk Posted March 13, 2015 Share Posted March 13, 2015 Another factor is that Canadian dollar weaken very significantly since the previously peak of oil in July, so the decline in oil in Canadian dollar terms is not as significant: Brent Crude went form a peak of $110 USD in July, to about $60 over the past month (45% decline), but in Canadian dollar terms that's only a 35% decline. Over the same period comparison, the gas price in vancouver dropped from $1.52 to ~$1.22 (20%), but as others noted there is at least $0.42 of tax, so the before tax drop is 27%. As crude oil needs to be processed, the price of gasoline will not be perfectly correlated to the price of crude, as it is really subject to the supply and demand of gasoline. You can find the spot price for Gasoline in the international market, and it turns out the drop is 27% in Canadian dollars. Vancouver's recent gas price seems pretty inline with the international market. Link to comment Share on other sites More sharing options...
Warhippy Posted March 13, 2015 Share Posted March 13, 2015 Yet another massive drop in the west texas intermediate which will be followed by the resulting drop in brent prices. Claim taxes that's fine and true. Taxes are in fact part of the reason and exactly why i stated governments are in bed with oil companies for exactly the same reason junkies love chemists But here is yet another story regarding price drops and a glut in the supply chain which is only going to get much much larger. Now, wait for it. The prices WILL rise again next week. Find the justification for it. ==================================================================== Oil prices might have stabilized only temporarily as the global oil glut is building due to oil production in the United States showing no signs of slowing down, the International Energy Agency said on Friday. The agency also raised its forecast of global oil demand growth for 2015 by 75,000 barrels per day (bpd) to 1.0 million bpd, bringing demand this year to an average of 93.5 million bpd. "Tentative signs of a demand recovery have emerged with the turn of the year, with a heavy emphasis reserved for the word 'tentative'" the IEA said in a monthly report. The price of a barrel of the North American oil benchmark known as WTI lost about $1 on the news, trading hands at $46.17 early Friday. The West's energy watchdog said the United States may soon run out of spare capacity to store crude, which would put additional downward pressure on prices. That process would last at least until the second half of 2015 when U.S. oil production growth should start abating. "On the face of it, the oil price appears to be stabilizing. What a precarious balance it is, however," it said. The slightly higher demand forecast has led to an increased demand for OPEC crude of 30.3 million bpd, the IEA said, closer to the group's real production levels and its official 30 million bpd target. http://www.cbc.ca/news/business/wti-down-to-46-as-iea-says-oil-glut-is-getting-worse-not-better-1.2993592 ========================================================== Again, taxes are only a small part of it. But with the largest glut in over 25 years in the supply chain, the prices per barrel dropping by full dollars a day and the prices at the pump being as high or higher than they were when oil peaked at $142 per barrel. You cannot seriously disqualify price gouging and collusion Link to comment Share on other sites More sharing options...
Lockout Casualty Posted March 13, 2015 Share Posted March 13, 2015 They always have a reason to jack up gas prices.... - conflict overseas - weak Canadian dollar - strong Canadian dollar - hot weather / cold weather - lack of supply - lack of demand - oil prices - refinery issues - demand from China - OPEC actions - taxes Pretty much however they want to spin it. I always love seeing pro-business conservatives complain about businesses acting as businesses. Some delicious irony there. Link to comment Share on other sites More sharing options...
Warhippy Posted March 13, 2015 Share Posted March 13, 2015 I didn't even bother bringing up Russia either Russia is set to almost triple production by next month and will sell at lower prices than OPEC normally allows to try to make up for massive budget shortfalls due to sanctions from the west. And again Venezuela just announced their numbers as well and it looks like they're going to be doubling production as well. These are two of the largest crude producing nations on the planet who are happy to sell at below WTI or brent prices to make money for their countries So again, complain it's about taxes or regulatory pricing along the supply chain. But with the price of oil now under $50 a barrel (it was a few dollar drop overnight on the WTI) and the supply chain at capacity and now two of the largest producers ramping up production, with Iran also set to triple production by the second half of the year there is NO reason short of price gouging and collusion that prices should be as high as they are or higher than when the price per barrel was over $140 IN all honesty if enough people got together they could feasibly start a class action suit right now against oil companies who refine for fuel purposes and there would be very little excuses any lawyer could bring up as to why prices are so high. Cold weather in houston and a 1 week strike do not justify a 15 cent increase at the pump. Link to comment Share on other sites More sharing options...
Heretic Posted March 13, 2015 Share Posted March 13, 2015 Stop whining and complaining. Gasoline is still less than water (bottled). Link to comment Share on other sites More sharing options...
CALGARY! Posted March 13, 2015 Share Posted March 13, 2015 It has alot to do with the refineries and most of all.... the taxes provincial and federal governments put on it. You can mostly thank your/our various elected leaders for about 70% of the price of gasoline.. as for diesel its a little bit of a supply and demand thing, a few big diesel refineries have shut down in the past few years leaving production to just a handful of places, so they can gouge a little more Link to comment Share on other sites More sharing options...
CALGARY! Posted March 13, 2015 Share Posted March 13, 2015 The only fuel that has actively followed the price of oil in its plummet fully is jet fuel, Air Canada and Westjet are paying just a little over a third of what they were paying this time last year, although, because they hedge all there fuel contracts they won't actually see the decline in prices for another month or two, unless they bought out of their hedges. Next time you fly and they try to charge you for that one piece of luggage your bringing tell them you want a discount for the fact that their paying a fraction of the fuel bill they were last year. Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted March 13, 2015 Share Posted March 13, 2015 Stop whining and complaining. Gasoline is still less than water (bottled).On that note, water is a far more valueable resource which is supposed to be a free human right and we're being blinded to the fact that we're being led into having to purchase it. Link to comment Share on other sites More sharing options...
Heretic Posted March 13, 2015 Share Posted March 13, 2015 On that note, water is a far more valueable resource which is supposed to be a free human right and we're being blinded to the fact that we're being led into having to purchase it. Not that I disagree, but where exactly does it say water, or anything for that matter, is a "free" human right? Link to comment Share on other sites More sharing options...
aGENT Posted March 13, 2015 Share Posted March 13, 2015 Bottom line is you need to drive and there's not a god damned thing you can do about the prices because the governments doesn't care and the oil companies have you over a $52 barrel Hey now! The government does care! They rely on those higher gas prices for a LOT of tax dollars Link to comment Share on other sites More sharing options...
thejazz97 Posted March 13, 2015 Share Posted March 13, 2015 On that note, water is a far more valueable resource which is supposed to be a free human right and we're being blinded to the fact that we're being led into having to purchase it. Water is a free human right. Selling bottled water is an industry. Link to comment Share on other sites More sharing options...
D-Money Posted March 13, 2015 Share Posted March 13, 2015 Hey guys and gals, I am just curious if anyone on here is in the oil business and could answer a question for me. We paid 1.40$ a liter when a barrel of oil was 145$, now a barrel is at average 50$ just about 1/3 of what it was, yet gas is 1.20$ a liter? Is it just a blatant screw job? Any input would be appreciated. 1) Canadian dollar is lower. When oil was higher, the dollar was close to par. But with a 78-cent dollar, $50 (USD) oil is still $64.10. That's closer to half than 1/3. 2) Refining, retail, overhead, and transport costs (other than fuel) are constant. They don't drop by 50% just because oil does. I don't know the exact numbers, but after a couple quick searches it looks to be around 30 cents per litre. 3) Other than GST, the taxes are constant too. Rather than charge a percentage of fuel costs for taxes that would fluctuate with the price, the government places per/L surcharges (detailed in RK41's chart) to maintain a more constant income. In the lower mainland, that works out to 44.28 cents (surcharges + GST on them), which will never change. So if you subtract the overhead and taxes, that remaining difference between our prices then and now is 65 cents and 45 cents. But based on the price of crude, the current prices are about 15 cents higher than they should be. What is the cause of this? Possibly, as you suggested, "screw job". But it could also be partially driven by a need to increase profit margins in fuel sales to offset losses in oilfield production, for companies invested in both. Link to comment Share on other sites More sharing options...
D-Money Posted March 13, 2015 Share Posted March 13, 2015 As for the people saying "we should storm Ottawa" and such, consider why fuel is taxed so heavily. One of the fundamental goals of macroeconomics is determining the true cost of something (including externalizing factors), and if possible, making the consumer pay it directly. When we use a liter of fuel, the cost to society goes far beyond just pulling the oil out of the ground, refining it, transporting it, and pumping it into our cars. We then drive on the roads, which need to be built/maintained. We pollute the air. We sometimes cause accidents. There are so many external costs, many of which have to be addressed by a public sector entity. (Whether the entities in place are efficient with the monies received is another story, but let's stay on topic.) It only makes sense to charge the person using the fuel for these costs directly. There is another aspect too. In many cases, driving is not an absolute necessity. And for those who do, there are ways to curtail amounts of fuel needed (carpooling, more fuel efficient vehicles, etc.). But it is just soooooo convenient. So how can the government encourage people to use less fuel, while still giving them complete freedom of choice? Tax the s*** out of it. It could be worse - much worse. A litre of fuel in London right now is $2.43 CAD. Compared to our measly 42 cents, their fuel duty is $1.09/L, and the VAT (GST equivalent) is 20% rather than 5%. Link to comment Share on other sites More sharing options...
TOMapleLaughs Posted March 13, 2015 Share Posted March 13, 2015 Not that I disagree, but where exactly does it say water, or anything for that matter, is a "free" human right?The fact that we think that it should have to 'say' this anywhere is part of the problem. We are 60-75% water. It is as essential to our existence as air and the sun. To let people charge us for these things is crazy. And yet here we are. It is currently illegal in many states to collect rainwater. It's apparently so precious that people are jailed down there for collecting it, but here in BC we're willing to give millions of litres of the stuff away for pennies. Anyway, this rant is OT, but we're being misled into believing that oil is the resource to worry about, when it is clearly water, and as the world becomes more arrid, that problem is only going to be more amplified. Hopefully cheap green tech and global deamericanization circumvents corporate greed here in the future. I think it will. Link to comment Share on other sites More sharing options...
Ronalds.Kenins41 Posted March 13, 2015 Share Posted March 13, 2015 I didn't even bother bringing up Russia either Russia is set to almost triple production by next month and will sell at lower prices than OPEC normally allows to try to make up for massive budget shortfalls due to sanctions from the west. And again Venezuela just announced their numbers as well and it looks like they're going to be doubling production as well. These are two of the largest crude producing nations on the planet who are happy to sell at below WTI or brent prices to make money for their countries So again, complain it's about taxes or regulatory pricing along the supply chain. But with the price of oil now under $50 a barrel (it was a few dollar drop overnight on the WTI) and the supply chain at capacity and now two of the largest producers ramping up production, with Iran also set to triple production by the second half of the year there is NO reason short of price gouging and collusion that prices should be as high as they are or higher than when the price per barrel was over $140 IN all honesty if enough people got together they could feasibly start a class action suit right now against oil companies who refine for fuel purposes and there would be very little excuses any lawyer could bring up as to why prices are so high. Cold weather in houston and a 1 week strike do not justify a 15 cent increase at the pump. Look at our prices internationally and you will realize we have one of the lowest prices in the world. It is not near the lowest but it's still quite low. Apologize for the grammar, spelling and neatness in this picture again, the pen in my program can only be used with a mouse so it's very hard to use. Link to comment Share on other sites More sharing options...
woot Posted March 13, 2015 Share Posted March 13, 2015 As for the people saying "we should storm Ottawa" and such, consider why fuel is taxed so heavily. ... Don't forget the carbon tax. Link to comment Share on other sites More sharing options...
aGENT Posted March 13, 2015 Share Posted March 13, 2015 The fact that we think that it should have to 'say' this anywhere is part of the problem. We are 60-75% water. It is as essential to our existence as air and the sun. To let people charge us for these things is crazy. And yet here we are. It is currently illegal in many states to collect rainwater. It's apparently so precious that people are jailed down there for collecting it, but here in BC we're willing to give millions of litres of the stuff away for pennies. Anyway, this rant is OT, but we're being misled into believing that oil is the resource to worry about, when it is clearly water, and as the world becomes more arrid, that problem is only going to be more amplified. Hopefully cheap green tech and global deamericanization circumvents corporate greed here in the future. I think it will. Well in fairness, you're pretty much paying for the delivery/container...not really the water itself. That people pay (and pay exorbitant prices) for it is their own stupidity. But given how ignorant, stupid and apathetic people in general are about a great many things they should care far more about, and absolutely dismissive of the environmental impacts of that same ignorance and waste, it really should come as no surprise. Frankly people would be far better off (health, financially, environment) investing in a quality, stainless steel, thermos style water bottle and filling it with tap water (or if you're pickier, something along the lines of a Brita). Link to comment Share on other sites More sharing options...
MadMonk Posted March 13, 2015 Share Posted March 13, 2015 IN all honesty if enough people got together they could feasibly start a class action suit right now against oil companies who refine for fuel purposes and there would be very little excuses any lawyer could bring up as to why prices are so high. Cold weather in houston and a 1 week strike do not justify a 15 cent increase at the pump. The major issue with that is that once you've accounted for exchange rate differences, it is hard to argue that the current gas price is out of line with historical data. Here's what I've found: Link to comment Share on other sites More sharing options...
Lancaster Posted March 14, 2015 Share Posted March 14, 2015 I always love seeing pro-business conservatives complain about businesses acting as businesses. Some delicious irony there. I always love seeing people misunderstand the difference between free capitalism from crony capitalism. Some of the world's largest petroleum companies are state owned. The Saudi's alone can exert way more influence on oil prices than Exxon, Shell, BP and Chevron combined. Lobbyists pretty much bribe politicians and bureaucrats to create an environment to neuter competitors, those crooks reaps the rewards, thus hiring more lobbyists to maintain/gain more of those noncompetitive advantageous, and politicians getting more kickbacks. Link to comment Share on other sites More sharing options...
TheAntar Posted March 14, 2015 Share Posted March 14, 2015 Another factor is that Canadian dollar weaken very significantly since the previously peak of oil in July, so the decline in oil in Canadian dollar terms is not as significant: Brent Crude went form a peak of $110 USD in July, to about $60 over the past month (45% decline), but in Canadian dollar terms that's only a 35% decline. Over the same period comparison, the gas price in vancouver dropped from $1.52 to ~$1.22 (20%), but as others noted there is at least $0.42 of tax, so the before tax drop is 27%. As crude oil needs to be processed, the price of gasoline will not be perfectly correlated to the price of crude, as it is really subject to the supply and demand of gasoline. You can find the spot price for Gasoline in the international market, and it turns out the drop is 27% in Canadian dollars. Vancouver's recent gas price seems pretty inline with the international market. The dollar rises and falls with oil prices, not the other way around. Anyone who says otherwise is either a) buying into the propaganda or b.) benefiting from the propaganda Link to comment Share on other sites More sharing options...
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