Thread: Gas Prices
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Old 06-15-2015, 02:00 PM   #22
Bownesian
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The main thing I see from that chart is the scales are different for the Crude/Gasoline prices. If one were to compress the green line so it fit in the top 60% of the chart, it would look extremely similar to the Canada average and someone who isn't much of a chart person would think there is excellent correlation.

Regarding captainyooh's last question:

Oil is a global commodity and the cost to ship it is relatively small compared to its value (and a fair amount smaller than the 15% difference in the USD:CAD). Thus, the wholesale price is pretty similar in all interconnected jurisdictions with no tariff difference (such as North America). If a barrel is selling for $100 US in Cushing Oklahoma, and your bid as a refinery operator for that barrel was $100 CAD and there was a 15% difference in the dollars, I wouldn't sell it to you, I would sell it to the refiner in Cushing. Thus the prices stay very similar to each other.

The geographic variance we see is first and foremost dependent on which province/state you are talking about (HST/PST/GST, excise taxes, carbon taxes), and then much further down the list is the distance to a refinery and market size.
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