Letter to Editor

You may be wondering why the price of gasoline is rising while the price of oil and the value of our dollar have remained fairly stagnant. For the record, on March 4, 2015, the price for regular gas in Whitecourt rose to 97.9 cents a litre. This is basically where it was when oil was $90/barrel. Oil is currently just over $50/barrel. It has been fluctuating between $50 and $54/barrel. Our dollar is just over $.80 US. It has been fluctuating between $.78 and $.80 US.

The price in the US for wholesale gas in December 2014 was about $1.60 US. This translates into about $.40/litre. I am not going to factor in the difference in our dollars because Canada does not get world prices for its crude. In fact, we get $15 to $20/barrel less. This is about the same difference as our dollars.
Add $.25/litre for taxes, and the rest is shipping ($.03 to $.05/litre) and then profits.

As you can see, the profits are really high. Add to this that the oil companies also own the refineries and can set the price wherever they want (in both the US and Canada). You will find that refinery profits are also very high.

What has happened is that the oil companies are adding the profits they used to make on crude to the price of gasoline. The end result is that most oil companies will continue to make the huge profits they always make. Except now, they can claim they are being hurt by low oil prices. That is why the PC government has said they will not be increasing royalties or corporate taxes.
Instead, while the oil companies continue to reap huge profits, the PCs will ask ordinary Albertans to cover the revenue losses caused by subsequent and continuous PC mismanagement.

Eugene Eklund