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Originally Posted by nik-
Oil isn't gasoline though. We don't refine it here, we buy back refined product. So our production is really irrelevant.
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We do actually. Edmonton is a relatively large refining complex and Alberta is actually a net exporter of refined petroleum products. The "problem" though is that there is not a lot of refining capacity south and west of us (edit: and north of course). So our supply orbit is pretty massive, resulting in a lot of people (i.e. demand) for a relatively limited regional (Alberta and surrounding area) supply. That's what drives the higher Alberta prices. Its the same reason gasoline isn't virtually free in Texas despite it being the refining hub of the world (gasbuddy.com says its currently the 11th cheapest state).
Quote:
Originally Posted by Corral
Another public policy gaffe brought to you by the 40 year PC dynasty. Focus almost entirely on maximizing exports for short term gain, sell cheap, and be a price taker on refined products. Brilliant.
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It's called the free market. That has virtually nothing to do with the Provincial government and everything to do with the free market supply & demand characteristics of the Western Canada and Pacific Northwest refined petroleum product supply orbit. Unless you'd prefer they take a Venezuelan "provincialization" of our oil & gas industry? You must be a fan of Quebec's dairy supply management policy then hey?
edit: To add, of course "Alberta" (the oil & gas companies is what you mean) is a price taker on refined petroleum products. So is every other producer of refined petroleum products. They're a commoditized good. Being a price taker is literally the #1 market characteristic of a commodity. You can't control the price. The only thing that can be done to compete is to reduce cost or invest capital in assets to produce a higher value product (e.g. premium gasoline, or Northwest Upgrading...although I question if its return on capital will actually end up paying out).