Gas prices in Calgary

[burn_this_city]

The addition of carbon taxes probably break the correlation a bit. Which would explain the 2015 beyond numbers.

[GGG]

Originally Posted by Dion

'Gas bar shenanigans'



https://www.cbc.ca/news/canada/calga...ries-1.4735427

This one bugs me.

How is it a shinanigan to raise prices as soon as your competitors raise their prices. If the gas station you go to gets stuck with expensive gas will you continue to fill up with them if the station beside it is cheaper? Of course not. So stations need to charge what the replacement litre will cost them.

The complaint that it doesn't drop fast enough is probably valid but again it's a function of how supply and demand work where a small decrease is enough to change behaviour so why would you decrease all at once.

[Frequitude]

Same. How is it shenanigans to increase price after your own wholesale supply cost went up. B******* like this is why folks get irrationally emotional towards O&G companies without doing a shred of research.

[Aleks]

Originally Posted by Frequitude

A basic investigation into the underlying data behind this statement would reveal it is incorrect. Even with all the other factors between Alberta gasoline and WTI (FX, regional supply/demand, pipelines, differentials, etc.), the two are still extremely correlated.

You can clearly see when the dissociation happened right at the Jan '15 mark, when crude plunged and the pump price soared. While there is some loose correlation that remains, you can see that after that point there is lots of crude goes down gas goes up variance, much moreso than the graph before that point where the pump price is just a step behind the crude price.

[nik-]

Originally Posted by Aleks

You can clearly see when the dissociation happened right at the Jan '15 mark, when crude plunged and the pump price soared. While there is some loose correlation that remains, you can see that after that point there is lots of crude goes down gas goes up variance, much moreso than the graph before that point where the pump price is just a step behind the crude price.

https://xe.com/currencycharts/?from=USD&to=CAD&view=5Y

Right around Jan 2015

[Frequitude]

Originally Posted by Harry Lime

There are graphs to prove every viewpoint. This is what the people of BC are being fed on a weekly basis.

http://www.policynote.ca/gas-gouging...oil-not-taxes/

Graphs!

Anyway, I'm not invested enough to argue it. I'm just one of the dozens, maybe multi-dozens, of customers who need this product to get to work every day or choose to die of starvation. Kirk out.

On second thought, no I'm not letting you get away with that crap without being called out. You came in here, made a ridiculous factless claim and were proven wrong with actual research and data. Walking away screaming "Graphs!" is not a counter argument. Just suck it up and say "oh snap, didn't realize that, guess I was wrong. Looks like gasoline prices are pretty correlated with oil prices".

Oh and that "Graphs!" counterpoint link you provided further supports the correlation between oil and gasoline.

[Aleks]

Originally Posted by nik-

https://xe.com/currencycharts/?from=USD&to=CAD&view=5Y

Right around Jan 2015

But that's not the only instance in the timeline of the chart that USD/CAD variance was high

[Locke]

Its clearly the Vanguard of a Lizard-Man conspiracy.

[Harry Lime]

Ah, a few other people have come in and said that the correlation deviated over the last three years, and you seem ok with that.

The 'graphs' comment was a dick move, I'll give you that. I just had better things to do, and there are people more saturated in the minutiae than I who could better illustrate the nature of the argument opposite to yours.

It took me about four minutes to find a timeline, and pull this example.

2013 - Oil rose swiftly to $118.90/barrel on February 8. This sent gas prices to $3.85/gallon by February 25. Prices had started rising earlier than normal because of Iran's aggressive war games near the Strait of Hormuz.

The oil industry collectively acts like a frightened rabbit if it is in their economic interest. Clearly an excuse to raise prices, as no one in their right mind thought that Iran was about to start sinking ships in the strait, or close their most important economic portal. When the games completed, there was no immediate jump back to the norm, even given the correction for the time of year. The higher price due to the minor threat to supply was used as the new base cost for gasoline.

You can't see how behavior like this is frustrating to a consumer?

(As an aside, I took about 30 seconds to google 'gasoline price connection to oil price' and pull the first BC based article knowing that it would be littered with graphs. I was being an ass, and I'll own that)

edit : as an aside, the brinksmanship over the Strait of Hormuz is fun to get into. The reaction by England, USA and the EU was designed to impress on Iran just how outmatched they were if they wanted to get testy, and Iran did a lot of awesome fist shaking. This was going on since December 2011, so the war games weren't exactly out of the blue.

[Frequitude]

Originally Posted by Harry Lime

The 'graphs' comment was a dick move, I'll give you that. I just had better things to do, and there are people more saturated in the minutiae than I who could better illustrate the nature of the argument opposite to yours.

No problem. Let's be friends again. I'll also try to debate (ok, rant...) in a less arrogant manner.

Originally Posted by Harry Lime

Ah, a few other people have come in and said that the correlation deviated over the last three years, and you seem ok with that.

Correlation has not deviated, variance has though due to the Canadian dollar going in the crapper which makes both the ups and downs more levered. Correlation has remained rock solid at around 0.95 over the past 3 years.

Originally Posted by Harry Lime

2013 - Oil rose swiftly to $118.90/barrel on February 8. This sent gas prices to $3.85/gallon by February 25. Prices had started rising earlier than normal because of Iran's aggressive war games near the Strait of Hormuz.

The oil industry collectively acts like a frightened rabbit if it is in their economic interest. Clearly an excuse to raise prices, as no one in their right mind thought that Iran was about to start sinking ships in the strait, or close their most important economic portal.

It's not the oil and gas industry that is acting like a frightened rabbit. It is the massive financial markets who trade oil that set the price. Hell, Goldman Sachs has a ridiculously bigger impact on the price of oil than a Suncor or Imperial does. It may sound odd, but oil and gas companies don't set prices. It's a commodity which makes them price takers. That's why their entire focus is on cost. It's the only thing they can do to improve our margin.

Originally Posted by Harry Lime

When the games completed, there was no immediate jump back to the norm, even given the correction for the time of year. The higher price due to the minor threat to supply was used as the new base cost for gasoline.

I'm seeing a massive and rapid $0.40/L drop in that chart right afterwards.

Originally Posted by Harry Lime

You can't see how behavior like this is frustrating to a consumer?

The swing in price certainly must be frustrating to a consumer. But placing that frustration entirely, or even largely, at the feet of the oil and gas industry is misplaced anger. I understand why its happening...the massive anti-oil funded marketing campaigns have clearly worked so they seem like easy marks. In some ways I see similar to entirely blaming home builders for the 2008 housing bubble.

[Aleks]

I think another reason people are pissed (and legitimately so) is that we are paying more (4th highest in Canada) for a product distributed in our own back yards. Yes, provincial carbon tax has to do with this as well, but reasons or excuses don't change the fact that its comical a predominant oil producing province is paying a lions share.

If we want to go a little further we can do exchange included calculators for US vs. CA per unit cost. Currently, at the cheapest (in SC), its $2.51 USD per gallon, or $3.29 CAD per gallon, or .87c/L. At highest (Hawaii FWIW), its $4.86 CAD per gallon, or $1.28/L so we are paying more than an island in the middle of the pacific, known for its exhorbitant goods prices due to *shocker* location.

Yes, taxation is a factor of that, but regardless of who we are getting gouged by, we are getting gouged.

I feel terrible for the single moms who need a car for employment, or fixed income individuals, where they don't have the flexibility like most of us do to shrug it off.

[nik-]

Oil isn't gasoline though. We don't refine it here, we buy back refined product. So our production is really irrelevant.

[Cowboy89]

Originally Posted by Aleks

I think another reason people are pissed

The root cause of all reasons why people are pissed about gasoline prices is because these prices can be volatile and sometimes (rather abruptly) people have to pay more for something that in the short term they have no reasonable substitute for. They also cannot change their consumption of it in the short term either and it's a natural reaction to be frustrated to have to pay more.

All gouging arguments basically stem from an emotional response to that reality and most 'data driven' arguments on that side are basically data mining by emotionally motivated people looking for an argument to support their beliefs. These threads tend not to pop up in times like in February 2016 when crude and gasoline prices were at multi-year lows. The thesis that lizard-men are manipulating markets to gouge consumers doesn't seem to hold up as well when prices drop, nor are there as many angry people looking for them then.

[Aleks]

Originally Posted by Cowboy89

The root cause of all reasons why people are pissed about gasoline prices is because these prices can be volatile and sometimes (rather abruptly) people have to pay more for something that in the short term they have no reasonable substitute for. They also cannot change their consumption of it in the short term either and it's a natural reaction to be frustrated to have to pay more.

All gouging arguments basically stem from an emotional response to that reality and most 'data driven' arguments on that side are basically data mining by emotionally motivated people looking for an argument to support their beliefs. These threads tend not to pop up in times like in February 2016 when crude and gasoline prices were at multi-year lows. The thesis that lizard-men are manipulating markets to gouge consumers doesn't seem to hold up as well when prices drop, nor are there as many angry people looking for them then.

Well no kidding when it's low threads like this don't pop up, I don't think people get upset when they pay what is reasonable.

And you're right, people do get frustrated because it does cause short term (or sometime long-term) hardship, so people have every right to be upset and frustrated. Look at Haiti when the government raised the prices. Its not fair to have people bent over a barrel, regardless for the length of time, they know people will continue to pay it and for some people that's the difference of food, utilities, etc. That's unreasonable. Your Ability to absorb that fluctuation without much concern doesn't dictate anyone elses situation

[Locke]

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.

[Cowboy89]

Originally Posted by Aleks

Well no kidding when it's low threads like this don't pop up, I don't think people get upset when they pay what is reasonable.

And you're right, people do get frustrated because it does cause short term (or sometime long-term) hardship, so people have every right to be upset and frustrated. Look at Haiti when the government raised the prices. Its not fair to have people bent over a barrel, regardless for the length of time, they know people will continue to pay it and for some people that's the difference of food, utilities, etc. That's unreasonable. Your Ability to absorb that fluctuation without much concern doesn't dictate anyone elses situation

Sure, but just because people are frustrated or upset doesn't mean they're being gouged.

[Erick Estrada]

Originally Posted by Aleks

I feel terrible for the single moms who need a car for employment, or fixed income individuals, where they don't have the flexibility like most of us do to shrug it off.

We live in an era where even homeless people have cell phones. It's likely a very, very small amount of people in this country where an extra $0.30/L is the difference between eating and going hungry. How many people complaining in this thread really can't afford it? The issue at hand is that it's an inconvenience that cramps the style of the average Canadian that has cable, internet, cell phone data, Netflix, etc. Most impacted are businesses reliant on fleet vehicles that see their operating costs go up and they can always pass that cost on.

[GGG]

And wasn't this thread originally created becuase of the fictional belief that gas prices went up before long weekends.

I Happy the most recent increase occurred directly after a long weekend to kill that argument for the rest of summer. But I am saddened to see another flawed arguement take its place.

[Corral]

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.

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.

[Frequitude]

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.

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).

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.

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).