A Question about Gas Prices in Canada

[adaminc]

One thing I've always wondered, Venezuela produces there own Oil and refines their own Gasoline, as does Saudi Arabia, and they both have very low gas prices.

So why does Canada have such high gas prices in comparison, we have the 2nd largest deposit of oil. Is it because it costs so much to refine the tar sands? or is there something else I am missing like they export most of it so the supply is lower? or is it because OPEC defines the prices of Oil? or could it be because nations like Venezuela and Saudi Arabia have Govt run Oil production facilities to keep prices low for citizens?

If these countries can do it, why can't we? Or would this be more like something a socialist nation would do, so people don't like the idea.

 

[aesop081]

One thing I've always wondered, Venezuela produces there own Oil and refines their own Gasoline, as does Saudi Arabia, and they both have very low gas prices.

Alot of the Oil from Venezuela is not refined localy but shipped to the island of Curacao and refined there. That is in the Netherlands Antillies if you were not familiar. I was there recently and let me tell you, it is non-stop oil tankers going to and from the island.

 

[adaminc]

So you'd think that would drive up the cost of gas, that is if its corporate oil, but if its govt I guess it would be subsidized or something. Interesting nonetheless that they do this and yet have one of the lowest prices per gallon of gasoline.

 

[aesop081]

So you'd think that would drive up the cost of gas, that is if its corporate oil, but if its govt I guess it would be subsidized or something. Interesting nonetheless that they do this and yet have one of the lowest prices per gallon of gasoline.

Actualy, i wouldnt be surprised if the Gasoline refined in Curacao is exported to the US market not the local Venezuelan market.  It would be fair to assume that it also supplies the antillies and Caraibean markets as well.

As for gas prices in venezuela, i suspect they are heavily subsidized by the government.

 

[retiredgrunt45]

You also have to take into consideration that in Canada, there is also quite a bit of tax attached to that litre of gasoline. Take away those taxes and we would also have fairly low gas prices.

 

[aesop081]

You also have to take into consideration that in Canada, there is also quite a bit of tax attached to that litre of gasoline. Take away those taxes and we would also have fairly low gas prices.

Forgot about that......somewhere around 51% of retail gas price in Canada is Taxes IIRC

 

[adaminc]

Ah yes, fuel taxes, who needs properly paved roads anyways!

 

[aesop081]

Ok, i was bit over on the percentage...

http://www.petro-canada.ca/en/media/296.aspx

 

[formerarmybrat23]

Ah, I remember that pie chart from when i worked at the irving bigstop. The first times that gas hit one dollar, people would come freak out on us. Blaming greedy irving. They don't seem so greedy when they only get two percent. Plus as I always said: "stop freaking at me, its not like i get i share from every fuel purchase".

 

[niceasdrhuxtable]

One thing I've always wondered, Venezuela produces there own Oil and refines their own Gasoline, as does Saudi Arabia, and they both have very low gas prices.

So why does Canada have such high gas prices in comparison, we have the 2nd largest deposit of oil. Is it because it costs so much to refine the tar sands? or is there something else I am missing like they export most of it so the supply is lower? or is it because OPEC defines the prices of Oil? or could it be because nations like Venezuela and Saudi Arabia have Govt run Oil production facilities to keep prices low for citizens?

If these countries can do it, why can't we? Or would this be more like something a socialist nation would do, so people don't like the idea.

I think the difference here is that Canada, for the most part, is an open market economy. If we had a controlled economy it would probably be easy for the government to dictate the prices and destinations for all the supply, or even run it themselves, but in our economy, producers are free to sell to whomever they'd like for whatever price they'd like. This pretty much opens us up to the global oil/gas market since a producer of either of these products is going to sell them at the highest price he can fetch. So, if Canadian gas stations were to only offer 40 cents a litre for the gas they purchase, I don't think many producers would be clamouring to sell their supplies to them, but would rather sell them to the US or somewhere else that is offering more attractive pricing.

The truth is that any supplier/retailer will charge what the market will bear. In Venezuela, all the oil is produced by the a state owned company and then the refined gas is sold at a heavily subsidised rate. So really, they're getting cheap gas prices as a cost to some other social service provided.

It could be much worse. When I was in Belgium they were charging $2.20/cdn per litre all the way back in 1999. Our prices tend to be much cheaper than Europe's.

 

[Kat Stevens]

I was just in Trinidad last week.  $.40/l  for regular gas, $.22/l for diesel.

 

[Greymatters]

A lot of price increases are also driven by the fact that oil is no longer 'owned' specifically by companies, but by company ownership, specifically the shareholders, who expect large returns for their investment.

 

[STONEY]

Then there are greedy provincial Gov"s  who have to get their cut hence the great price disparity between provinces, so much for one country from sea to sea.