Letter: High Gas Prices – Aaron Neaves
I like many in our community have fallen victim to the high gas prices that we have seen take off especially in the last few weeks. I read an article in Tuesday March 1 2001 edition of the Chatham Daily News that caught my eye. It read “high gas prices continue” as I read the article, I stopped on the second page and read our local MPs version of what he considers to be “perfectly normal forces” and that this is simply “supply and demand”.
I wonder if this has anything to do with the petroleum industries before-tax profits of $50 billion in 2008 or their massive tax gift from Ottawa. Todays prices are now at the highest level in Canadian history. So much for helping out the average Canadian and trying to help and support the average Joe such as every day commuters going to their job if it hasn’t been ravaged by this recession, or for helping out the workers who drive trucks, the farmers who will soon be filling up the tanks as they prepare for another planting season or how about the unemployed person trying to make ends meet as they try to secure new employment or new educational opportunities.
I for one do not buy into this madness that the geopolitical events on the other side of the world have any bearing on these ever soaring prices. Most of the gasoline we buy is refined from our own oil. it is no more expensive to produce than it was last year. But thanks to globalization, speculation and greed we are forced to pay more and more.
What is wrong with today’s government discussing and implementing a new Canadian energy policy that would oversee the more gradual and steady development of our resources, control exports and foreign ownership. This would ensure that Canadians pay a fair sustainable price.
A high dollar, high resources and a declining exporting base is just a recipe for a deeper economic recession as these “forces” ravage the real foundations of our economy.
Aaron Neaves
Michael C
March 9, 2011 at 10:37 am
We would have to quit NAFTA to do it, I doubt the benefit of that
Reid Shepherd
March 9, 2011 at 11:18 am
Aaron,
I completely agree with you. It’s a tough pill to swallow when MPs start talking about ‘just normal supply and demand’ when they are the ones who make the rules. Sympathizing with the people trying to make ends meet is a joke – we need action, not talk. Alas, the National Energy Program, attempted by Trudeau was such a hated initiative, that I feel what you are talking about would go over in a similar fashion out West. There, the higher fuel prices that hurt people everywhere mean more jobs and higher profits in one particular sector: energy.
Dan
March 9, 2011 at 1:08 pm
Quiting or renegotiating NAFTA would be the first step in the right direction. With Canada having the second largest oil reserves in the world we should be leveraging that. You want our oil…U pay…U wnat our lumber…U pay!! Unbelievable that we had to pay a tarriff to the USA to ALLOW them to purchase our best lumber while leaving the warped and knotted crap for our own citizens…I have a lot of American friends that laugh about that fact!! And isn’t it amazing that all the other oil exporting nations of the world can sell gasoline to their citizens for 25% of what we pay!!
The feds and province better rethink and ramp up their strategies on fighting poverty here in our own country..look at that “Do the Math” challenge…food prices have already gone up 5-15% over the last year and now they are going to up them again next month!??! More people are about to join those poverty ranks than ever before thanks to these gasoline and food and energy price hikes. So we are all poorer now than last year. So much good the hikes in minimum wage will have done…they will only be able to buy as much with that $10/hr as what they were able to buy 2 yrs ago at $8.50/hr! I guess we will all need to go to our employers now and demand 10% wage hike so we can all afford to live again..oh wait..that will hike prices even further…so we need to ask for 25% raise to head that off!! We are already told we are at record debt levels…how is anyone supposed to be able to afford to pay yet even more unless the creditcard companies up our limits??
Its about time Canada’s massive resources started to benefit the citizens of this country and the govt got control of all the corporate greed and gouging!!
Billyea
April 3, 2011 at 7:58 am
Yes and the US will say, you want our manufacturing jobs such as auto, you will have to pay. And since 80 percent of our exports are to USA, they will slap a tariffs on our products and we will get crushed. You can’t use a union mentality and think Canada can strong arm the USA. They would crush us like an ant.
MikeyMoney
March 9, 2011 at 4:29 pm
I’ll do my fair bit of complaining on the price of gasoline and the taxes on fuel at the pumps however I do like to put things into perspective…Gasoline comes from oil that is taken out of the ground, piped to a factory, refined and then pumped into our vehicles @ about $1.20/L. Now as I sit and write this I look out at people sucking back on a cola which is essentially sugar water for about $2.69 a glass or likely $5/L by my quick guess. Now think of it that way for a second…oh and now someone just bought a bottled water for about $3/L…and how much would a large coffee come to per litre???
Dan
March 9, 2011 at 6:13 pm
Sorry MikeyMoney, but I totally have to call BS on that comparison as it does not compare like to like, apples to oranges so to speak. As a contractor, and due to the nature of the work, I require a larger size pickup truck..a one ton dually to be specific. Im lucky to get 3km per litre. Im not happy about the mileage, but at $75,000 for a new truck to save an extra 1km/ltr, it just isn’t feasible…and we all know what the economy is like here in Chatham. A round trip from say Chatham to Ridgetown and back to give a customer a FREE estimate only cost me around $15 worth of fuel MAX! It now costs me $35+ to do that same estimate…and its looking like soon it will cost me almost $50!! For a job I may not even get!! I need to earn a living. Since 100 litres worth of fuel will only get me approximately 300km of driving, I can easily go thru a tank in a day between jobsites, getting and delivering materials, doing an estimate or two…..by your comparison, there is not a chance in hell that I will be drinking 100 litres of water, cola or any other liquid on the very hottest day of the year!!
I hear and see this comparison you make all the time…generally from people who have very little need to do much driving to earn their living…lucky them. Frankly, I think the cost of cola and water and fruit juice is out of control as well given our current climate of corporate greed and gouge. I could easily compare the price of printer ink at $4500.00 per litre, however I won’t be drinking that or fuelling my truck with it either!!
Dan
March 9, 2011 at 6:27 pm
Oops…just to clarify the omission in my above post….when i said $15 a round trip MAX to Ridgetown…I meant to type “only a decade ago”..it does cost around $35 now, and at a $1.50 per litre will be nearly $50. Even though all my costs have doubled to tripled in only ten years, I still seem to only earn the same! Everytime I increase my price to try and give myself a little raise and still give my customers a fair price…some other supplier hits me with an increase and steals my raise!
And lets all not forget when we discuss the oil industry…First they extract it from the ground, where they sell it to themselves for a profit on the world market, then they sell it to themselves again (the refinery) for a profit, then they sell it to themselves again for a profit on the wholesale finished product market…and while some of that finished product is then sold to very few independent retailers at a profit, the majority is sold once again to themselves at a profit to their corporate retail gas stations who then finally sell it to us the final consumer at yet another profit. And none of this even takes into account all the other fractiles of that barrel of oil that are used to make thousands of products which are also sold to all of us at a profit.
Unstable and high prices of fuel make such a huge impact on the lives of so many people that this kind of gouging behaviour should be considered a crime against humanity and a matter of national security. Its about to start causing a whole new round of suffering!! Its economic warfare!!
twoguest
March 10, 2011 at 12:15 am
These comparisons to other liquids always make me laugh. I don’t know about you but I find living in an area which isn’t served well by mass transit (not a complaint, we don’t have the population density)means I need a vehicle and since I can’t afford a hybrid or electric one I have to purchase gasoline. I also drink water but here I have a choice and I choose to get mine from the tap and not from a $3 bottle. If I could get gas from a tap at my house for 1% of the cost of “bottled” gas then you would have a point.
Chang
March 9, 2011 at 5:44 pm
We should also have a government investigation into the millions of jobs destroyed by unions. The financial burden of unemployed workers is a drain on all taxpayers.
ont-liberals-makeitworse
March 9, 2011 at 7:48 pm
We can also thank the Liberal Party of Ontario for contributing to 8 additional percent of this cost.
jp
March 9, 2011 at 8:49 pm
Gas prices can only go up from here boys and girls. It has nothing to do with who is in power, Conservatives or liberals the price is going to climb, and there is one simple reason. supply and demand!
as long as there is a demand for gasoline they can charge what ever they want.
I know most of you don’t remember hurricane Katrina, you know the hurricane that they told us only affected poor black people and oil company’s. The one we stopped hearing about when the next big story came along. Do you remember how high the gas prices were then??? I remember filling up at $1.35/L. All because of some damage to a couple of oil rigs.
When commodities are controlled by big powerful money hungry corporations, the only result can be difficulty sitting without the use of donut shaped cushion.
you can complain all you want, there is nothing we can do. democracy while being wonderful has its downfalls.
Michael C
March 10, 2011 at 7:19 am
Now might be a good time to post this link
http://www.energypulse.net/centers/article/article_display.cfm?a_id=2393
Remember that the Saudi’s have been overstating their reserves for years, and the US Department of Defense is expecting a huge shortfall in supply during this decade.
Now we could make the political decision to leave NAFTA, and keep the oil we have for ourselves, but when push comes to shove, and the USA decides it is in its strategic interest to take control of Canadian oil, it will be 1812 all over again, and it will not be a fight to a stalemate this time round.
Michael C
March 12, 2011 at 3:08 pm
If you doubt the Americans would take such action, then let me remind you that Congress this week passed The Energy Tax Prevention Act. This act, amongst other things says “To amend the Clean Air Act to prohibit the Administrator of the Environmental Protection Agency from promulgating any regulation concerning, taking action relating to, or taking into consideration the emission of a greenhouse gas due to concerns regarding possible climate change, and for other purposes.”
So now the word “pollutant” excludes carbon dioxide, methane, nitrous oxide, sulfur hexafluoride, hydrofluorocarbons, perfluorocarbons, and any other substance that science might discover contributes to climate change, and says the EPA cannot regulate them.
They really can be that stupid, and if they can be that stupid, they can certainly resurrect their pre WW2 plans to invade Canada.
Terence Johnson
March 14, 2011 at 11:00 pm
…and the Harper Government(tm) whose idea it was to rope Ontario and BC into HST in the first place.
The irony is that they’ve effectively implemented a stealth “Green Shift” by increasing gas tax like this.
Harry
March 15, 2011 at 9:17 am
and don’t forget that Harper promised to eliminate the GST on all gasoline if the price went over 85c/L, and last election he promised no excise tax on diesel for farmers.
Two more broken promises.
Dan
March 15, 2011 at 11:14 am
yes Harry, but lets also not forget your beloved fiberals are the most recent create hardship by hiking that gst on gasoline by 8% due to the ill thought hst! Tax on tax on tax is just wrong, wrong, wrong!!! High gas prices do NOT make us more competitive, just the opposite. Have U seen any prices on anything come down yet from business passing on savings?? Didn’t think so…yet another baseless claim. Harper and McGuinty both need to go!!
jp
March 15, 2011 at 12:09 pm
“Harper and McGuinty both need to go!!
that has to be the smartest thing i have heard in days. I second that statement!
Fidel Kilpatrick
March 15, 2011 at 11:03 pm
Nice try, Terence Johnson. McGuinty & Duncan approached the feds to harmonize the Ontario PST with the GST. Your hero Iggy is on board with it too(because he really had no choice). He made a little racket about it only because his job is to “officially oppose”. It’s not like Iggy could run a country or anything. Read all about it here:
http://www.cbc.ca/news/canada/toronto/story/2009/09/22/mcguinty-ignatieff-hst-agreement251.html
Thank you and good night.
Fidel Kilpatrick
March 9, 2011 at 9:57 pm
It is “supply and demand”. Simple as that. Jp is right on this. It doesn’t matter who’s in power. Lib/Con or NDP – you’d pay the same. I’m thinking the author of this letter should move somewhere more democratic like Venezuela or Saudi Arabia where the government subsidizes gasoline. He might also find himself in jail for writing a letter like this to their so called “free press”.
Sally Joyce
March 10, 2011 at 1:41 pm
Hmmm so far I do not see any suggestions for planning alternative transportation. I am a planet loving gal so walking or bicycling is my choice…I realize that this is not possible for everyone…but I really think it is time for people to seriously consider carpooling…We can point fingers all we want at oil companies, gas prices etc. and spend much of our energy fighting something that is inevitable or we can put some of our creative enrgy into coming up with people and planet friendly solutions. I know that the hair is coming up on the back of many necks as I suggest that they may want to change their lifestyle to consider incorporating carpoooling…but we have been spoiled for a lonnnnggg time here in North America. A little flexibility in your schedule
may go a long way in your pocketbook.
So Rob what do you think about CKDP.ca hosting a carpooling resource site where CKers interested in carpooling can connect with one another???
Michael C
March 10, 2011 at 8:02 pm
Face the inevitable, Gas will be $200 a barrel within the next few years. Better start rethinking the kind of vehicle you have to drive. Do you really need a big honking truck to do an estimate?
Dan
March 11, 2011 at 3:10 am
would it really make sense to spend money on a second small vehicle, pay the crooked insurance companies yet another premium when i can only drive one of the vehicles at a time, and drive up to a 1/2 hour or so each way to switch vehicles in the middle of the day to go do the estimate? That would waste even more fuel, capital, and time!
Thanks for trying to help with your suggestion but i’ve done the math long ago and the logistics just don’t work in such a small market as C-K which is so geographically spread out. All I can do is attempt to schedule estimates at times when i will be in the area or close to drive as few kms as possible, but the date and time must be convenient to the client. There is no telling where the current jobsite may be at that convenient time for the client. A small car might work if i were a larger company and spent all day everyday doing estimates while a crew of workers did all the manual work…i have to do both.
Dan
March 10, 2011 at 7:53 pm
To those who are suggesting here that the explanation for these high prices is simple…supply and demand…
Give your simple heads a shake and stop believing the propaganda pumped out by the oil company greed and lazy politicians who are parroting a simple answer to avoid doing any hard work to protect you, their constituents, interests!!
It has already been reported that there is no disruption in supply what-so-ever. The Saudi’s are making up the lost production with room to still spare. Even if Libyan oil is completely cut off they claim to have production capacity to cover it…and all that oil goes to Europe…NOT North America.
There has been NO significant change in supply here, nor has there been any significant change in demand here either…certainly not to the tune of 15+% as suggested by the price increase. Supply in North America is completely determined by the big oil companies deciding how much gasoline they wish to pump out of their refineries at any given time. If the price drops enough they simply shut down operations at some of these refineries claiming they need to do “routine” maintenance, therby slowing supply and pumping up their own profits.
Therefore supply and demand has absolutely nothing to do with recent price increases…what it is based on right now is SPECULATION…which put simply is the big oil company’s middle stream operations purchasing ‘futures options” now to simply make a huge profit when it is delivered in a few months, by taking advantage of the latest world news to screw us all over. Speculation is nothing but greed and gouge.
So to all who think this is supply and demand…think about what i just explained here…I’m sure it will make a great deal more logical sense than this S & D nonsense!
Lancer
March 18, 2011 at 11:39 am
In November 2010, the International Energy Agency confirmed that conventional oil had indeed peaked in 2006. It was recently revealed through Wikileaks that Saudi Arabia has over stated its reserves to the tune of 300 billion barrels or a 10 year world supply at current consumption rates. Already world oil supplies are on the decline while demand continues to increase as we are using 5 barrels of oil for each new barrel we discover, an unsustainable position. The recent political events have markets jittery as several OPEC countries are experiencing unrest and thus raising the price of oil. Every penny the price of fuel rises at the pump removes 100 million dollars from the Canadian economy. What does this mean for the average citizen of Canada? Expensive oil raises the cost of everything it touches directly or indirectly. The higher price of oil has the effect of increasing poverty, forcing families to look hard at their household budgets.
There are roughly 3 categories of household expenses: food and transportation, bills and discretionary spending (everything else.) The first thing to go is everything else, vacations, new purchases of durable and soft goods (cars, furniture, clothing,) RRSP contributions, pets, subscriptions, memberships and activities, charitable contributions, anything along those lines. The second category is bills, utilities, credit card and loan payments, medications, mortgage and rent payments, taxes. The third category is food and transportation. Downgrades in this category result in cheaper and less healthy food being substituted for higher quality food, two car families may become one car families, and fewer car trips.
The fall out is considerable, if you job is dependent on spending in the “everything else” category, the threat of the lose your job or business is very real. (Remember how GM and Chrysler as well as several airlines took it on the chin in 2008 when the price of oil spiked to $147/barrel?)
The popping of the housing bubble and sudden wave of homelessness in the US was largely the result of people having to choose between paying down the mortgage or eating/ paying for fuel to drive to work to be able to afford to eat. Side effects from the loss of jobs and homes, family stress goes up when the charities and government agencies that help people cope must do so with a shrinking pool of resources. These financial stresses can bring about fear and frustration, anger and despair and manifest themselves in higher rates of substance abuse, family strife and violence, homelessness, malnutrition, suicide and crime.
High fuel costs for a society that isn’t prepared for them is one body blow after another until the body, collapses. The way forward involves transitioning off oil and adopting methods and practices that make your household and community more resilient and sustainable. Knowing what is happening and why, can assist in planning for a prosperous future despite the trend of higher prices and all of their effects; it’s up to us to do it.
One of the paths to transition through this tough time is the Transition Town movement. Transition Towns provide practical methods, tips and strategies for families and communities to meet challenges created big outside factors like rising oil prices, weather events, and economic events.
Michael C
March 19, 2011 at 7:54 am
“The popping of the housing bubble and sudden wave of homelessness in the US was largely the result of people having to choose between paying down the mortgage or eating/ paying for fuel to drive to work to be able to afford to eat.”
I would like to see your evidence for that.
Lancer
March 19, 2011 at 12:57 pm
You could start with these links Michael C. There are about 12 different writers commenting along the lines I summarized in my comment. If you want to check out the book by Canadian author, Why Your Wolrd is About to Get A Lot Smaller by Jeff Rubin, you should be able to pick it up at the library. He is talking in the first link on a video.
http://www.energybulletin.net/stories/2010-11-08/jeff-rubin-oil-and-end-globalization-aspo-usa
http://www.energybulletin.net/node/46804
http://www.energybulletin.net/stories/2011-02-07/commentary-how-oil-shortage-missing-cup-flour
http://www.energybulletin.net/node/36950
http://www.energybulletin.net/node/50628
Michael C
March 21, 2011 at 7:05 am
Don’t get me wrong, I don’t disagree with the basic premise in your arguement, but I do think there was, and is, much more to it than that. I can remember the days when Japanese goods were considered inferior to European and N American goods. Toyota put the lie to that arguement.
I don’t see any evidence of a resurgence in shoe making in the west, on the contrary, I see furniture being shipped from China, because they can still land it in N America, at least as cheaply as the shoddy stuff being foisted on us by some of the N American manufacturers.
Much more important a factor, IMHO, is that the west was fixated upon the consumer economy, encouraged by politicians who wanted to be reelected, in a period when real wages were stagnant, and the only people making obscene amounts of money were not making it from production, but by trading upon the backs of those they were ostensibly helping.
Was the housing bubble going to continue if interest rates had stayed low?, well maybe for a little longer, but the reality was that housing had got completely out of control, and no longer related to long term trends, see the Case-Shiller index.
Michael C
March 21, 2011 at 7:14 am
Incidentally, this is an ex-banker trashing bankers.