take back our oil

[eyeball]

Wow you really think that? The Price at your pump is set by the wholesale price and transportation costs. The wholesale cost is drived by the futures prices being payed in the stock markets.

The wages at the Co-op gas bar are union scale, at the Petro-can station they are minimum wage. This should translate into price differences that are visible at the scale of tenths of a cent but it isn't. Why is that? In other threads right now there is talk of busting unions to reduce the cost the public pays for services. Why?

Interstingly enough, the Co-op gave us a 5% rebate last year and it sounds like we'll be getting 7% this year. Strange isn't it?

Edited April 22, 2008 by eyeball

[oreodontist]

As I understand it market value is derived when the manager of our Co-op gas bar and the manager of the Petro-Can station next door either call each other or look at the other guys sign and match it to the same tenth of a penny, usually within the same tenth of a second.

The only exception to this was when it was to windy for the Petro-can guy to safely get up his ladder. Alas, he now has a sign that he can change from the safety of his counter.

I think the Co-op manager misses the days when he could play with the price and see how many times he could make the Petro-can guy go up and down his ladder.

I hope you are kidding. I doubt if anyone could be so naive that gas prices are set by their local gas stations. That's like thinking that the world price of ice cream will go up this week because you bought two tubs of it last week.

[eyeball]

I hope you are kidding. I doubt if anyone could be so naive that gas prices are set by their local gas stations. That's like thinking that the world price of ice cream will go up this week because you bought two tubs of it last week.

The only thing I was kidding about was the Cop-manager pushing Petro-can's buttons. The fact remains however that the prices change by the same tenth of a cent within the same amount of time. Please explain how that's possible in a competative economy.

I should add that both gas stations receive their deliveries from different trucks on different days. In other words, shouldn't the price a station charges reflect the smaller cost of a fuel delivery a week ago compared to the other stations price of stock that cost a few cents more to deliver yesterday?

Edited April 22, 2008 by eyeball

[M.Dancer]

The only thing I was kidding about was the Cop-manager pushing Petro-can's buttons. The fact remains however that the prices change by the same tenth of a cent within the same amount of time.

And they probably all change throughout your region for the same reason. Their analysts all watch the same commodity boards.

[eyeball]

And they probably all change throughout your region for the same reason. Their analysts all watch the same commodity boards.

So the lack of competition is on Bay Street. Gotchya.

[Wilber]

The wages at the Co-op gas bar are union scale, at the Petro-can station they are minimum wage. This should translate into price differences that are visible at the scale of tenths of a cent but it isn't. Why is that? In other threads right now there is talk of busting unions to reduce the cost the public pays for services. Why?

Interstingly enough, the Co-op gave us a 5% rebate last year and it sounds like we'll be getting 7% this year. Strange isn't it?

Unlike the Petro-can, your Co-op sells much more than gas. What makes you think your rebate comes from its fuel sales?

Today's wholesale price for gasoline is 80 cents a liter. After you add taxes, transportation and the dealers operating costs, there isn't much room for profit at their level no matter who is selling it.

[eyeball]

Unlike the Petro-can, your Co-op sells much more than gas. What makes you think your rebate comes from its fuel sales?

The itemized statement that separated my fuel purchases from the other things I bought. There is still the differential in costs stemming from the fact that the Co-op pays union scale wages and the Petro-can pays its employees about 50% less. The Co-op also has far more employees I might add.

In prices that reflect tenth of a cent increments this wage differential should be apparent and gas should be cheaper at the Petro-can station.

[Wilber]

The only thing I was kidding about was the Cop-manager pushing Petro-can's buttons. The fact remains however that the prices change by the same tenth of a cent within the same amount of time. Please explain how that's possible in a competative economy.

I should add that both gas stations receive their deliveries from different trucks on different days. In other words, shouldn't the price a station charges reflect the smaller cost of a fuel delivery a week ago compared to the other stations price of stock that cost a few cents more to deliver yesterday?

Prices for anything at the retail level are determined by what the market will bear. Getting it at a lower price will allow one dealer to undercut another but if he doesn't have to, why would he cut his own throat by doing so?

[Wilber]

The itemized statement that separated my fuel purchases from the other things I bought. There is still the differential in costs stemming from the fact that the Co-op pays union scale wages and the Petro-can pays its employees about 50% less. The Co-op also has far more employees I might add.

In prices that reflect tenth of a cent increments this wage differential should be apparent and gas should be cheaper at the Petro-can station.

I don't dispute that your fuel costs may be lower but how do you know if that fuel isn't being subsidized by the rest of the Co-ops operation. The reason every gas station has a convenience store these days is because that is where they make most of their money, not from fuel.

The gas stations I worked in as a kid had gas pumps and maintence bays where cars were serviced and repaired. There might have been a coke machine. They are very rare today.

[Pliny]

The only thing I was kidding about was the Cop-manager pushing Petro-can's buttons. The fact remains however that the prices change by the same tenth of a cent within the same amount of time. Please explain how that's possible in a competative economy.

I should add that both gas stations receive their deliveries from different trucks on different days. In other words, shouldn't the price a station charges reflect the smaller cost of a fuel delivery a week ago compared to the other stations price of stock that cost a few cents more to deliver yesterday?

Are PEI and NS considered competitive economies?

Their gas price regulations have the price at the pumps set by government committee. The competition is limited to the big corporations and their profits are measured by what price they pay to get the province's supply delivered.

There is no competition at the pumps. Do you live in either of those provinces? The above may explain why you see the same prices at the gas stations. If you don't live in either of those provinces then, other than occasionally, in order to see a difference in prices you will have to drive to a different county or the next town to see a difference. The competition is pretty fierce and you probably won't notice any difference in the price between brands in your neighbourhood.

Hope that helps.

[M.Dancer]

From a recent email, tangential to the subject....

In regards to boycotting the two giants to force them to lower costs....

How admirable of you to launch everyone into action but the strategy is slightly flawed. Having worked in the oil industry, the companies themselves had agreed on an inventory share and balancing agreement. It is not cost effective for one company to have numerous distribution centres so the 'players' fill up at each others' refineries (selected by proximity to destination points) and then at the end of every month they simply calculate how much they drew from each other and how much was drawn from their own facilities. Then they paid each other the difference (balancing).

You may fill up at Esso but you may be getting Shell product, etc. If volume drops off at a particular station, the company may decide they have too many stations in that area and close that station - thereby inconviencing you by forcing you to fill up at stations not currently as convenient.

Your admirable efforts (and energy) might be better directed at your elected MPs to try and force Harper to honour his promise to remove the GST from gas when it passed the $.90 mark. OPEC says they won't increase production because current demand is seasonal and therefore increased supply may cause a glut in the fall.

An even better solution - reduce consumption. Ditch the SUVs and gas guzzlers, use public transit, or how about walking the next time you need to go to the corner store. There's even the 'buy local' campaign........

After all, aren't we all concerned about doing our part to protect our environment?

Edited April 22, 2008 by M.Dancer

[madmax]

want cheap gas? all candians have to do is... take it back! its our, isn't it?

lets follow the lead of venezuela where gas is $.12 a gallon! and venezuela recently told big oil to get lost!

Take back our oil And put it back in the ground where it came from?

OIL is up to .12cents a gallon. I was there when it was .05cents a gallon. I recall that if the price of oil went up their could be a revolution....

Ours has doubled in price about the same.

However, I could just see some parties saying that low fuel prices are bad for us. I could see the government freaking at not getting its fair share of tax revenue off of the GST. I could see Alberta and its foreign owned and purchased government crying to no end about not letting the oilcompanies make a fortune while they claim a pittance of the oil revenues.

Venezuela is a work in progress. EIther he is onto something or it will become bankrupt.

It was poor when I was there, yet one of the richest countries, full of wealth, but always having right wing corrupt puppet governments. Much like the rest of Latin America that went bankrupt under those failed neo con policies.

And most of Latin AMerica has responded with left and far left and father leftwing governments.

What I found interesting about Chavez is that there is a strong communist movement that he is holding back, and they don't think he is doing enough and are also considering overthrowing him, whereas the former elite, capitalists and oil union workers want to get back into power with the aid of the USA.

IF we nationalized our oil, the US lobby would cry bloody murder, the money for propoganda campaigns would make each supporting Canadian Politician be as welcome as Sadam Insane and OBL.

Just isn't going to happen. THe US wants the oil, and they get it first.

[Topaz]

Last year, it was said that oil would be 150.00 barrel. If you think lawmakers are going to help us you are wrong. Think about it. They probably have hundreds if not thousands of shares in oil and gas and wehn the prices go up so does their bank accounts. Its the same with the war. Investments into companys that make military weapons bring in the money. The lawmakers will also say for the good of the country or we have no control over this. IF the auto makers produced more cars that don't use gas, what a panic would the oil and gas companies have!

[Wilber]

Topaz, if you want to buy oil and gas shares no one is stopping you. But you are half right about one thing. The feds charge GST on the final price of fuel including the other taxes. Every time the price goes up, the government makes a killing.

[eyeball]

Last year, it was said that oil would be 150.00 barrel. If you think lawmakers are going to help us you are wrong. Think about it. They probably have hundreds if not thousands of shares in oil and gas and wehn the prices go up so does their bank accounts. Its the same with the war. Investments into companys that make military weapons bring in the money. The lawmakers will also say for the good of the country or we have no control over this. IF the auto makers produced more cars that don't use gas, what a panic would the oil and gas companies have!

Can anyone imagine Canada would have scrapped the NEP if they thought oil would hit $150 a barrel?

[jbg]

As I understand it market value is derived when the manager of our Co-op gas bar and the manager of the Petro-Can station next door either call each other or look at the other guys sign and match it to the same tenth of a penny, usually within the same tenth of a second.

That's because the wholesale price charged by Fina, Petrocan and the like rises and falls based upon the competition faced by its retailers. The practice has names such as "Competitive Price Allowance", "Zone Pricing" and the like.

Trust me, I've litigated this issue twice in the US.

[eyeball]

Being gouged is like abuse. If it feels like that's what's happening, it likely is.

[White Doors]

Being gouged is like abuse. If it feels like that's what's happening, it likely is.

Nice analysis.

[Riverwind]

Can anyone imagine Canada would have scrapped the NEP if they thought oil would hit $150 a barrel?

If they had not scrapped the NEP then we would have never seen the massive investment in the tar sands. We would likely be in a situation similar to Mexico which is seeing production decline.

Anyone who thinks the oil companies should be nationalized should ask themselves whether they would be happy to have their home expropriated for less than market value in order to provide low income housing. Nationalizing oil companies amounts to the same thing.

Edited April 23, 2008 by Riverwind

[Wilber]

Being gouged is like abuse. If it feels like that's what's happening, it likely is.

The question is, are you being gouged. Gasoline is a commodity sold on the open market. If a bunch of people want it and bid the price up in order to get it, is anyone being gouged because it is expensive or are they just being charged market value. Wholesale gasoline hit 92 cents US a liter today because of demand, not because someone arbitrarily set that price. The only question is why demand is so high compared to supply. Is the supply being controlled in order to manipulate the price or are events themselves a large factor. The answer of course is both. We know that there haven't been enough refineries built in the last two decades to keep up with demand if there are any problems. We know OPEC raises and lowers oil production levels to manipulate prices and we also know that emerging nations have greatly increased world demand making any hiccup in the supply have an knee jerk effect on price. Energy is also increasingly being used as a hedge against currency devaluation by big investors in the same manner as gold.

Is that gouging? I just think it is market forces at work. I does kind of feel like abuse though.

[jbg]

We know OPEC raises and lowers oil production levels to manipulate prices and we also know that emerging nations have greatly increased world demand making any hiccup in the supply have an knee jerk effect on price. Energy is also increasingly being used as a hedge against currency devaluation by big investors in the same manner as gold.

Is that gouging? I just think it is market forces at work. I does kind of feel like abuse though.

Your conclusion is right. However, I'm one who believes that most OPEC production is always at capacity and that only managerial incompetence in nationalizing Muslim companies drives production down.

[socred]

want cheap gas? all candians have to do is... take it back! its our, isn't it?

Actually, none of the oil and gas belongs to "Canadians". Resources belong to the provinces.

[madmax]

i'm sorry, we can't use taxes to pay for roads and health care? again, i was talking about using export revenues here, not domestic.

We are not allow to tax exports on oil, because that was what the Americans wanted in FTA. It is one of the reasons why Carbon Tax Proposals by various advocates will do little in Canada to solve their environmental concerns.

If we ship 99% of our oil to the US

Example 100 Barrells,

and Import 99% of our oil

say 9 Barrells

We have 10 Barrells of oil that will have the consumption (Carbon) tax.

If Export oil was to be taxed, then 99 barrells exported, plus 10 barrells Domestic would be taxed.

Not that I am an advocate of this....

But if you want to take back our oil....

Tax the highest user and consumer of Oil, who pay LESS then we do.

Those revenues could be applied to our own environmental concerns.

But this is not going to happen. Changes FTA, is Not going to happen.

Ironically Mexico Protected their Oil in the NAFTA agreement.

Go Figure.

[madmax]

The fact is oil, is the new gold. People who are losing faith in currency are now putting their money into energy and that can be any investor, not just oil companies.

How many times do we hear about "Black Gold".

There is nothing new about it, or market speculation driving the price up higher then realistic.

We have been here before with every oil scare since the early 70s. Often proved false after a huge bust in market speculation and cartels unable to contain their message.

Remember the same was done with Hydro in the US and all that was achieved was Blackouts in California, and investments in Enron....

Gas prices have been artificially low, and artifically high, because of all the political variable that get involved. Often driven by the US more then anything ever done here, including the NEP, which was more or less overwith before it ever got off the ground.

Losses during this period occurred in every oil producing country, but the NEP was an excellent scapegoat and great political tool for Brian Mulroney to secure the West and Drive the Libs out for good.

The NEP represents hostillity more then anything else, so any other of its kind would be DOA.

[madmax]

We are paying fair maket value.

If we were to believe such a statement, you would see more Mom And Pop and Indepent suppliers.

This is considerably different then in the US.

If you look at other countries that controlled their oil supply, like Iraq, when under Bath rule, oil was similarly priced with Venezuala. After Freedom, they pay fair market value, after the US takes their fair share 1st.

I have little reason to believe that we are paying "fair" market value at anytime.

Fair and oil is an oxymoron.