Fuel prices jolt drivers
Ontario studies price freeze as industry claims 'price war' over
Pauline Tam
The Ottawa Citizen; With files from The Canadian Press
Chris Mikula, The Ottawa Citizen / In the past year, gasoline at this west-end service station has cost as little as 45 cents a litre.
The gasoline industry is blaming an increase in world oil prices, high demand from motorists and the abrupt end of a local price war for a sudden increase that has pushed the cost of a litre of gas in Eastern Ontario to its highest levels in two years.
Motorists were shocked yesterday to find that many of the region's gas stations had raised their prices to a high of 60.9 cents a litre -- an overnight jump of almost seven cents, or 14.2 per cent.
Thomas:
This was in today's Citizen newspaper - shades of the future aka Jay Hanson.
Citizen:
The last time local gas prices broke the 60-cent barrier was in September 1997, when consumers paid a high of 60.7 cents a litre. It's the second time in the past four weeks that the region's gas prices have made such a dramatic leap.
"It's pure greed on the part of the oil companies," says Bernard Ruzeen, spokesman for the Ottawa-based consumer group called the Citizen Coalition for Fair Pricing at the Pumps. "It's predatory pricing that has nothing to do with the international price of oil."
Thomas:
The average citizen, who has not had the benefit of our insider information continues to believe that this is just a profit grab by oil companies, rather than the first tendrils of the winds of change that is going to restructure globalization, transportation and life as we know it and believe it is our solemn right to continue to exist with.
Citizen:
The price increases once again led to calls by consumer groups for the federal government to investigate gas-pricing practices.
Jim Innes, a spokesman for the federal Competition Bureau, said the government watchdog will continue to monitor price increases, but the office is powerless without any clear evidence of illegal price-fixing.
Thomas:
In terms of price fixing, I agree, the government is probably powerless. However in terms of honesty, an honest set of statements regarding world stocks is overdue, now is the time to start telling the citizens of Canada, that the party is over in regards to cheap fuel prices and that from now or very shortly, we can all expect energy to become more expensive, scarce and valuable. Of course, they won't do it because they are afraid it will cause panic - which it will.
Citizen:
However, a spokesman for Ontario's consumer ministry said it might consider a gasoline price freeze.
Jim Cowan said the government is reviewing its options, which could include new consumer-protection laws.
Mr. Cowan said the province has always maintained that gas prices are a federal issue but that the federal government has failed to act to stop the gouging.
Thomas:
With regret, I cannot find a posting, I'm sure I saved which stated that the real cost of a gallon of gasoline was $15, when all the subsidies, tax breaks and special regulatory exemptions were added into the price of crude oil. This was in the US, but the same is probably true for Canada. So, rather than the Government protecting us from price gouging, the government through slight of accounting has deliberatly kept the price of fuel below a true market value.
Citizen:
Before the latest increase, prices were in the 57-cent range; less than a month ago, they averaged 49.9 cents a litre. A random survey of Ottawa-area stations yesterday showed prices ranged between 60.5 cents and 60.9 cents a litre. In Greater Toronto, prices rose as high as 64.9 cents a litre yesterday. And in the U.S., gas prices reached the highest retail levels since November 1997. According to the U.S. Department of Energy, gasoline prices have risen 29 per cent since February, when the country recorded the lowest average price since government surveys began in 1994.
Spencer Knipping, an oil and gas analyst with the Ontario Ministry of Energy, Science and Technology, said Canadian gasoline prices generally fall in line with those in the U.S. because of free trade.
Brendan Hawley, spokesman for the Canadian Petroleum Products Institute, said the latest increases come amid a shrinking supply of oil worldwide leading to steady increases for the price of crude.
Thomas:
So, here it is officially! " amid a shrinking supply of oil worldwide", but did the article pick up on it - nope, I'm surprised it even got included. Co-incidentally, the following little gem was in my morning Graffis postings:
WE NEED YOUR HELP to stop new oil exploration in the Arctic!
The coming weeks, the Greenpeace ship MV Arctic Sunrise is touring the Arctic ice edge between Siberia and Alaska to investigate the effect of climate change on the ice and on marine mammals, such as walrus and sea
lion populations.
The tour is part of our campaign to stop new oil exploration in the Arctic, the last frontier, but at the same time one of the last crumbs on the global plate!
"one of the last crumbs on the global plate!" Yep folks, that's the semi official statement! All the easy fields have been discovered - all the hard fields have been utilized, we are now down to the crumbs of petroleum energy reserves and you can guess what the cost is of discovering and opening up these kinds of resources. But the kicker still comes from Jay, what if it costs more energy to get that crumb than is in the crumb itself - God forbid we may actually have to start dealing with reality instead of economics here.
Citizen:
Since last December the price for a barrel of West Texas intermediate crude oil, the industry benchmark, has gone from $11.30 to the $20 range.
Peak demand from motorists during the summer travel season is also pushing up prices at the pumps, Mr. Hawley said.
But while the two factors might contribute to an upward trend in gas prices, they do not explain the radical jump in prices virtually overnight. Instead, the sudden increase is being attributed to the end of a price war among retailers.
Thomas:
"radical jump in prices." I wonder what the reaction would be if there was a real radical jump in prices, let's say a doubling as all of a sudden we woke up to realize that the primary energy source of our civilization has been squandered due to low subsidized prices manipulated by oil companies and legislators for short term economic and politcal gain. The day that happens, I would not like to be the Party in power - think back to 1973 and the anger and the gas lineups. Only this time it won't be temporary. In fact, a vehicle without fuel is a pretty clumsy boat anchor and we don't even have horses to make Bennet buggies andymore.
Citizen:
"It's part of the normal cycle of ups and downs," said Mr. Knipping, adding that he expects prices will go down again shortly.
Indeed, consumer reprieve might be on the horizon. The price of crude oil fell five per cent in yesterday's trading. The decrease represented the biggest drop in two months, after a Venezuelan oil official said the Organization of Petroleum Exporting Countries should increase output if New York oil futures reach $22 a barrel.
Thomas:
Ah, the warm cozy reassurances from officialdom. And then the reality, the oil producing countries will probably allow more oil into the market if oil futures reach $22 per barrel. I would guess that it won't be long before those with reserves wake up and realize that $44 per barrel has a nicer ring in the cash register than $22. Capitalism thrives on shortages, that is where the biggest profits lie. Once it starts, we will probably find that governments cannot stop it, in fact, because they will profit as well, they will issue us placebo's while at the same time reap in the extra taxes. Gee, it's August, 1999. I wonder what gasoline will be worth in August of 2000. Just think if a few oil tankers and pipelines get sidelined via Y2K - perfect justification for price increases - right?
Respectfully,
Thomas Lunde
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