We Are Still Getting Screwed By Gas Prices Despite Low Cost of Crude

There is no more frustrating situation than being robbed every time we go to the pump and not being able to do a freaking thing about it. We are completely and utterly defenseless in the face of price gouging because we depend on our gasoline powered vehicles so heavily.

As I write this, crude is trading at $49.61 per barrel and gas at the major stations is selling for 125.9. Last summer when oil was above $100 per barrel, we were paying just 20 cents more per litre at around 145.0. There is simply too much inconsistency here.

Petro Canada wants you to think everything is perfectly normal though!! From their website:

Why do retail gasoline prices vary so much between markets and even within the same city?

While retail prices follow changes in crude and wholesale commodity prices, both up and down, they are also heavily influenced by local conditions. Factors such as market size, the level of competition, taxes, and retailing and distribution efficiencies can lead to situations where prices vary considerably between communities or change dramatically within a short period of time.

How do taxes affect gas prices?

• Taxes are one of the largest components of the retail price of gasoline, accounting for about 32%, or 40 cents per litre of the average pump price in Canada in 2012.
• The combination of taxes and crude oil costs together represents approximately 80% of the price at the pump.
• The remaining 20% must cover all costs of refining, transporting, distributing, marketing and retailing, as well as provide for a reasonable return on investment for the retailer and the company.

I feel soooo much better, Petro Canada, thank you for the wonderful explanation. It’s very smart to try to divert attention to “taxes” instead of your corrupt industry being responsible for gouging us.

It’s just too impossible to believe that refining costs (which represent less than 20% of the price of gas) and local conditions can account for so many fluctuations. I don’t but it and neither should you. The sooner we can all be driving electric cars, the better.