Gas Price Comparison

[Azim]

I saw 75.9 last night in Mississauga (just outside Toronto), and heard on the radio today that somewhere in the GTA there was a 69.9 price ( ). I remember when I first moved from Calgary to Ontario in '94, gas prices were significantly cheaper in Alberta. It now seems to have reversed, or at least the gap is a lot less.


Azim

[zztim81]

Just payed 82.9 in Cardston AB

I still cant believe im calling that cheap!!

two years ago in Lethbridge there was a gas war and the cheapest i got gas was 17.5 cents per L .... there was guys filling evey kind of tank you can think of at the gas stations!

[Shazam]

Originally Posted by fotze

Because you pay it. People absolutely refuse to change their lives or habits to lower this cost. People figure that they have a right to shelter food, water and gasoline.

But you see, our consumption isn't really the cause of this. It's China's and India's consumption. Since oil and oil refined products are fungible, we pay for their consumption.

Not saying that this absolves us in any way, but I don't think this means that gas should always be sold at a profit. A stable gas price would be better for most people because it allows for budgeting and would reduce outrage everytime the price moves. But that'll never happen now because oil companies would need to collude to fix the price.

And even oil companies don't actually like $70 oil, because it suddenly makes alternative energy sources viable. Good for us, I suppose.

[Bring_Back_Shantz]

You know what I love?

Reminding people that Alberta actually has a lot less refinery capacity than they think and that for the most part gas stations are all selling gas from the same refineries.

Is it collusion when every store charges $1 for a bag of chips?
No, becasue they all buy from the same supplier and add the same tax and markup.

Gas stations generally buy from the same refinery, add the same taxes, and presumably keep a pretty similar profit for themselves, it just kinda makes sense.

Sure they probalby look out the window and if the guy across the streed is a cent higher or lower they'll eat it, or take the chance to earn a little more, but the VAST majority of the price of gas is supply cost, and taxes, so there isn't much a gas station can do about $1/L gas prices.

[Reaper]

Originally Posted by Sidney Crosby's Hat

If you think about it, the price of gas in one end of Calgary is almost always the same in the other end of the city to the tenth of a cent.

Actually, I find that the price of gas is always more expensive on the North end of Calgary when compared to the South end by at least a couple cents per litre.

[Clarkey]

Originally Posted by Shazam

But you see, our consumption isn't really the cause of this. It's China's and India's consumption. Since oil and oil refined products are fungible, we pay for their consumption.

Not saying that this absolves us in any way, but I don't think this means that gas should always be sold at a profit. A stable gas price would be better for most people because it allows for budgeting and would reduce outrage everytime the price moves. But that'll never happen now because oil companies would need to collude to fix the price.

And even oil companies don't actually like $70 oil, because it suddenly makes alternative energy sources viable. Good for us, I suppose.

North American consumption is the cause of this, you can't just blame India and China. North America probably consumes over 1/3 of the daily world demand for oil (I haven't checked the numbers recently but a year or so ago world consumption was bout 80 mmbl/d the US used about 20 mmbl of that a day). If North Americans responded to price increases by altering their consumption you would notice a decrease in the world price.

Are you advocating price fixing of gasoline? Price fixing does not and will not work. And why would the gas retailers collude to fix the price, this is an absurd notion. You also wrote that gas should not always be sold at a profit, this makes no sense. Of course it should be sold at a profit or there is no incentive to sell gas. Are gas retailers supposed to be charities?

Oil companies LOVE $70 a barrel oil. Are you kidding me? The whole argument about big oil being afraid of alternate sources of energy is bunk. Oil companies are the ones most likely to have the capital required to invest in these areas.

[Clarkey]

Originally Posted by Shazam

The thing I've always wondered is just why gas companies always need to make a profit on gas. In most businesses, a company will absorb price increases for quite a while before resorting to raising prices. Oil companies seem to have carte blanche in this respect.

Because it is a highly competitive properly functioning market. There's not much room for product differentiation in gasoline, it's a homogeneous product. Gasoline companies first need to cover their costs (as responsible bottom-line companies), then they need to charge a price that returns them the most value. Because the gasoline retailing is so competitive the retailers aren't able to charge a price much above their costs. They can try but then the guy across the street will undercut and vice versa.

[The Goon]

An energy specialist for the Globe and Mail took on all these questions earlier today:

http://www.theglobeandmail.com/servl...alComment/home

It helped settle some of these issues in my mind.

[Flames_Gimp]

when Gasoline is more expensive than bottled water, I will complain about it.

[Flames in 07]

Originally Posted by Bring_Back_Shantz

You know what I love?

Reminding people that Alberta actually has a lot less refinery capacity than they think and that for the most part gas stations are all selling gas from the same refineries.

Is it collusion when every store charges $1 for a bag of chips?
No, becasue they all buy from the same supplier and add the same tax and markup.

Gas stations generally buy from the same refinery, add the same taxes, and presumably keep a pretty similar profit for themselves, it just kinda makes sense.

Sure they probalby look out the window and if the guy across the streed is a cent higher or lower they'll eat it, or take the chance to earn a little more, but the VAST majority of the price of gas is supply cost, and taxes, so there isn't much a gas station can do about $1/L gas prices.

Good post. It seems the less people know, the quicker they simple shut out information and say "collusion".

[KootenayFlamesFan]

Lucky me.......prices are still around 1.12-1.15 around here.

Bloody hell.

[Antithesis]

Originally Posted by Shazam

Not saying that this absolves us in any way, but I don't think this means that gas should always be sold at a profit. A stable gas price would be better for most people because it allows for budgeting and would reduce outrage everytime the price moves. But that'll never happen now because oil companies would need to collude to fix the price.

I don't understand your statement here ... oil companies aren't charities. Why should they take a loss on gasoline sales, even if it was 'only' from time to time?

[Flames in 07]

Originally Posted by Antithesis

I don't understand your statement here ... oil companies aren't charities. Why should they take a loss on gasoline sales, even if it was 'only' from time to time?

No Kidding, I think the proposition here is for governments to fix prices. The next economist I find who says society as a whole is better off when government intervenes in capital markets will be the first one.

[duncan]

94.9 today, lowest price in over a year. Last week it was 104.9.