how much does transporting fuel to gas stations cost?
Canadian Retail Gas Pricing 101 | Peak Oil News and Message Boards
(Or "Talk To Me About Gas Retail Pricing—Like I'm in Grade Four")
Last year back in April-May, when I visited family and friends in Hamilton, Ontario, regular gas was being retailed at the $1.37 to $1.45 per litre range. You could literally hear groans from motorists each morning as they saw the daily updated pricing posted at refuelling stations. During my three-week stay the upward trend was a sustained phenomenon.
Some close friends — upon learning I worked for the oil and gas industry (sort of, that is) and being based in Alberta — bombarded me with questions about gasoline pricing in Canada. (As if I had something to do with the increases, or that I would know enough to help them understand what was happening).
Truth was (and still is) the explanations I've heard from TV talk shows at that time have not greatly eased the clutter in my mind about the subject. I am still far from having a firm grasp of the relevant pricing mechanism.
Most popular questions/observations I received were as follows:
1."We are a major oil-producing country, aren't we? How come our gas prices are so high?"
2."Can you explain why gas is cheaper South of the border (U.S.A)?"
3."Is it true a major portion of the price is taxes?"
4."Can government not intervene and make gas prices more affordable especially for low-income families?"
I tried to give them a lay person's answer to some of the questions but, being as befuddled as they were, I didn't think I made much headway. The most I achieved, I think, was to make many of them understand I was as much in the dark as they were about the issue.
In the aftermath of this encounter with largely disgruntled inquisitors (disgruntled with the system, that is) I tried searching for answers and explanations. What follows is the result so far of reviewing information at certain key internet sites, particularly the excellent pages devoted to the subject at the Natural Resources Canada website, and at the Department of Finance Canada website.
Item #1: Petroleum Products Rack Pricing and The Law of Supply and Demand
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