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Alpaca · 01-21-2015, 03:55 PM

I have been a member of CP for a fairly long time, seldom post but enjoy reading the threads.
I have an idea for a possible Alberta Revenue solution and with the number of folks on here familiar with the oil industry thought I would run it by you.
Some what complicated and difficult to explain. But here is my best shot.
As the price per barrel of oil drops the revenue from Royalties drops as eventually does the price of gasoline at the pumps. So does diesel but the drop in diesel at the pumps is more complicated.
So the thought is as the price per barrel of oil drops there is an increase in the government take per liter of gasoline. This would be applied as the gasoline price drops. For example the price of a barrel of oil drops so as the price for gasoline drops the government take is 1/2 a cent for every 1 cent drop in the price of gasoline that would have occurred without the surcharge.
For example lets say a $10 drop oil prices results in a revenue loss of $1B per year, and a $10 price drop results in a drop of $0.10 in the price of regular gasoline. In this scenario the government would take $0.05 of the $0.10 drop and we the consumer would only see a $0.05 drop in the price at the pump.
For what I have been able to find on the internet Albertan's consume 6,000,000,000 liters of gasoline and 4,000,000,000 liters of diesel per year, and this is non farm consumption. The 5 cents per liter to the government is $300M plus what the diesel might be. In todays world the price of oil dropped say $40 with a Royalty revenue drop of $4B.
The pump price has dropped about 40 cents so if 20 cents went to the government and 20 cents to the consumer. Revenue goes up $1.2B for gasoline plus x from diesel. Consumer still benefits although not as much.
As the price of oil recovers, gas prices increase, the surcharge comes off.

Am I out to lunch?

01-21-2015, 03:55 PM	#1
Alpaca Farm Team Player Join Date: Mar 2007 Exp:	Potential Alberta Revenue Solution I have been a member of CP for a fairly long time, seldom post but enjoy reading the threads. I have an idea for a possible Alberta Revenue solution and with the number of folks on here familiar with the oil industry thought I would run it by you. Some what complicated and difficult to explain. But here is my best shot. As the price per barrel of oil drops the revenue from Royalties drops as eventually does the price of gasoline at the pumps. So does diesel but the drop in diesel at the pumps is more complicated. So the thought is as the price per barrel of oil drops there is an increase in the government take per liter of gasoline. This would be applied as the gasoline price drops. For example the price of a barrel of oil drops so as the price for gasoline drops the government take is 1/2 a cent for every 1 cent drop in the price of gasoline that would have occurred without the surcharge. For example lets say a $10 drop oil prices results in a revenue loss of $1B per year, and a $10 price drop results in a drop of $0.10 in the price of regular gasoline. In this scenario the government would take $0.05 of the $0.10 drop and we the consumer would only see a $0.05 drop in the price at the pump. For what I have been able to find on the internet Albertan's consume 6,000,000,000 liters of gasoline and 4,000,000,000 liters of diesel per year, and this is non farm consumption. The 5 cents per liter to the government is $300M plus what the diesel might be. In todays world the price of oil dropped say $40 with a Royalty revenue drop of $4B. The pump price has dropped about 40 cents so if 20 cents went to the government and 20 cents to the consumer. Revenue goes up $1.2B for gasoline plus x from diesel. Consumer still benefits although not as much. As the price of oil recovers, gas prices increase, the surcharge comes off. Am I out to lunch?