Posted Mar 8, 2022, 9:44 PM
|
|
Registered User
|
|
Join Date: Jan 2015
Location: BC
Posts: 4,588
|
|
Why are B.C. gas prices surging when the province gets most of its gas from local refineries?
Quote:
Gasoline is made from crude oil, the cost of which is determined globally. The cost is influenced by international supply and demand or geopolitical events.
Crude prices were already high before Russia invaded Ukraine but now, there's even more uncertainty around long-term supply since Russia is one of the largest producers of oil and gas in the world.
"It freaks you out as a buyer," said Vijay Muralidharan, a senior consultant at energy analytics firm Kalibrate. "Even if it doesn't happen, there's paranoia, so you bid up to make sure your supply is there."
...
Most of the gasoline in B.C. comes from refineries in Burnaby, Edmonton and Washington state, but the selling price of the oil going into those refineries is still decided by the global market.
"We have one price of world oil, and that basically is the price we cannot escape from. So no matter how much we wish the prices are local, they're not," said Werner Antweiler, a professor at UBC's Sauder School of Business.
Oil producers sell their products to refineries competitively, so if prices are up internationally, they'll be up locally.
...
There are four main costs that make up the price of regular gasoline:
* The price of crude oil.
* Refining costs.
* Distribution and marketing costs.
* Taxes, including federal, provincial and municipal taxes.
The cost of crude oil is the highest of those four costs, usually determining roughly half of the retail price of gasoline.
Removing taxes would lower the price of gas, but would do nothing to address the crude oil problem.
"Increasing the carbon tax as planned in April by one cent per litre, that pales in comparison to the 20 or 30 cents a litre that is essentially the Putin tax that's coming from the invasion of Ukraine by Russia," said Antweiler.
"The problem is we have a situation in the global market and no amount of changes to taxes will make that go away."
...
|
|
Prev
Linear Mode
