Quote:
Originally Posted by Bownesian
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The CAD has dropped from ~0.93 US in July last year to ~0.81 US now. That dollar depreciation results in a 15% increase in the costs we pay...
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How does it increase the costs we pay? All costs of oil extracted in Alberta is paid in $CDN (except for some US-imported equipment, perhaps), delivered to Alberta refineries via Canadian carriers for $CDN, refined for $CDN and retailed by Alberta retailers for $CDN. The net cost of gasoline delivered to an Alberta pump is $US-neutral and, more importantly, significantly lower than the cost of gasoline delivered to rural BC, for example. Therefore, it is not unreasonable to assume that it can be sold for less than some hypothetical world market price or, similarly, some hypothetical North American market price without affecting profitability of the Alberta gasoline supply chain. Yes, theoretically, even if they can sell finished product (gasoline) for more somewhere else in North America if the market price there is higher than here. But it does not automatically mean that it would cost them the same to deliver it there. This is a disconnect in a logic that I have a hard time justifying.