Gas Prices

[Tvisforme]

Originally Posted by casper

Poor working on the part of CBC. Why should a private company competing in an open free market have to account for a 13 cent gap in the price of its product.

It is not an issue of "can't" but an issue of "wont". It is not reasonable to expect an explanation.

It is certainly reasonable to expect an explanation, especially when the same product is sold in other markets without this (roughly) 10% "gap". We're not talking about a luxury item, it is a basic necessity for contemporary society.

[WarrenC12]

This is starting to look a lot like the housing situation in Metro Vancouver. Landlords and Gas producers will charge as much as they can get on the open market. Given our constrained supply of both, the price is high, and the margins are high.

Both goods are pretty much staples of modern society, and it pisses a lot of people off. There is some ingrained NIMBY opposition to more housing, and it's a slow process.

With respect to gasoline supply, we are "constrained" by TransMountain, but really, there's plenty of gas being refined in Edmonton, and plenty of capacity in the TM pipeline, only we are also shipping bitumen for export to China through TM instead of gas for Metro Vancouver residents.

In both situations it's even foreigners that we can blame...

[Sheba]

B.C. proposes law to force oil and gas companies to reveal how gas prices are set

The B.C. government has introduced legislation to force oil and gas companies to reveal to consumers how gas prices are set.

The Fuel Price Transparency Act, if passed, will allow the B.C. Utilities Commission (BCUC) to collect information from oil and gas companies on the market conditions involved in setting gasoline prices. The information will be made available to the public.

“It’s incredibly frustrating to watch the price of gas shoot up for no reason, and British Columbians are tired of feeling ripped off whenever they fill up their vehicles,” Jobs, Trade and Technology Minister Bruce Ralston said.

“This legislation sends a message to oil and gas companies: the days of setting your prices in total secrecy have come to an end.”

The BCUC investigated the province’s high gas prices and found southern British Columbians were paying an estimated $490 million per year in extra fuel costs due to an unexplained 13 cent differential between costs to oil and gas companies and the price at the pumps.

The province says the legislation was produced in response to the investigation that found a lack of competition and substantial markups, in the province’s gasoline market.

Fuel companies submitted that problems with the BCUC’s methodology, transportation costs and boutique B.C. and Canadian fuel standards were among the factors behind the differential. The BCUC did not agree with the response from the oil and gas companies.

The legislation requires companies to share data on refined fuel imports and exports, fuel volumes at refineries and terminals, as well as wholesale and retail prices.

The province has also included “safeguards” to ensure that the information provided by the companies is complete, accurate and reported regularly.

“By pulling back the curtain, these companies will be publicly accountable for unfair markups and cost increases that cannot be explained,” Ralston said.

“It will also produce a common set of facts moving forward, allowing us to properly evaluate other policy measures to bring fairness to the price at the pump.”

Companies will have to report their data and could face fines or administrative penalties if they fail to do so.

The legislation also sets rules for audits and inspections to ensure that the data being reported is complete and accurate.

[s211]

Originally Posted by Sheba

B.C. proposes law to force oil and gas companies to reveal how gas prices are set

It's with much irony that the NDP would fly this populist flag. Gasoline isn't exactly a human right. Wouldn't it be closer to their core policy to have price controls on food staples?

Honestly, NDP, in the words of Bart Simpson, we can see right through you like grandma's underpants.

[bluefox]

Originally Posted by s211

It's with much irony that the NDP would fly this populist flag. Gasoline isn't exactly a human right. Wouldn't it be closer to their core policy to have price controls on food staples?

Honestly, NDP, in the words of Bart Simpson, we can see right through you like grandma's underpants.

Price fixing is inherently anti-capitalist, though, so a bill restricting the ability to fix prices is not necessarily populist.

[MalcolmTucker]

I suspect there just aren’t enough gas stations around anymore to provide a truly competitive market if there are never or very few times when one station ‘breaks’ to recruit customers for lottery tickets, cigarettes, and milk. It means customers aren’t shopping around for whatever reason so there is no incentive to not capture an extra margin. In that situation would breaking up chains even have an effect? Or is there a downward spiral and the only available tactic is regulation like in some of the Atlantic provinces? Regulation provides consistency and transparency but it doesn’t historically provide lower prices.

[whatnext]

Originally Posted by MalcolmTucker

I suspect there just aren’t enough gas stations around anymore to provide a truly competitive market if there are never or very few times when one station ‘breaks’ to recruit customers for lottery tickets, cigarettes, and milk. It means customers aren’t shopping around for whatever reason so there is no incentive to not capture an extra margin. In that situation would breaking up chains even have an effect? Or is there a downward spiral and the only available tactic is regulation like in some of the Atlantic provinces? Regulation provides consistency and transparency but it doesn’t historically provide lower prices.

Of course is we all go to EVs the market won't be competitive at all.

[SpongeG]

It seems the Petro Canada on Broadway at Clarke seems to start the price war, they usually drop their price first and others nearby follow but it doesn't go far.

[MalcolmTucker]

Originally Posted by whatnext

Of course is we all go to EVs the market won't be competitive at all.

Even if we are on a trajectory to 50% EV sales of total vehicles by 2030, only 10% of the vehicle fleet by 2030 will be EVs. Certainly by 20 years from now as the fleet truly transitions the market won’t be nearly as competitive, especially if the cities keep providing upzoning almost exclusively on land that includes gas stations, instead of more broadly.

[s211]

Frankly, I'd be happy to learn that the unexplained difference is actually an f-you tax from the oil companies. Hey BC, maybe if you stopped being such a-holes about pipelines, you might find that spread slowly disappear. Makes for a great conspiracy theory, tin-hat people.

I suppose I should be surprised that BC should be so bald two-faced about oil and gasoline, but hey I guess I shouldn't be surprised.

[MalcolmTucker]

Originally Posted by s211

Frankly, I'd be happy to learn that the unexplained difference is actually an f-you tax from the oil companies. Hey BC, maybe if you stopped being such a-holes about pipelines, you might find that spread slowly disappear. Makes for a great conspiracy theory, tin-hat people.

I suppose I should be surprised that BC should be so bald two-faced about oil and gasoline, but hey I guess I shouldn't be surprised.

It is probably just an added cost of the friction crossing the border. The lower mainland doesn't have enough wholesale import capacity (barges, tankers, rail, product pipelines) or production capacity. The extra needs to come over the border in trucks. Trucks that need to be licensed for both Canada and Washington. A fuel mix that needs to be maintained for spot sales that is different from the Washington State mix. Without a unified market, you shouldn't expect unified prices.



And individual stores, with an inefficient market, why wouldn't they try to maximize their profit?

[WarrenC12]

Originally Posted by MalcolmTucker

It is probably just an added cost of the friction crossing the border. The lower mainland doesn't have enough wholesale import capacity (barges, tankers, rail, product pipelines) or production capacity. The extra needs to come over the border in trucks. Trucks that need to be licensed for both Canada and Washington. A fuel mix that needs to be maintained for spot sales that is different from the Washington State mix. Without a unified market, you shouldn't expect unified prices.

And individual stores, with an inefficient market, why wouldn't they try to maximize their profit?

I believe part of the latest report references price setting based on the highest marginal part of our gasoline supply, which comes from southern WA and comprises about 5% of our demand requirements. Everything else is cheaper to supply, but set against this higher price.

I wish I had a link.

[MalcolmTucker]

Yeah, prices will always be set based on the highest marginal price. That is how prices work. And everyone else gets to make the extra profit.

[whatnext]

Originally Posted by MalcolmTucker

Even if we are on a trajectory to 50% EV sales of total vehicles by 2030, only 10% of the vehicle fleet by 2030 will be EVs. Certainly by 20 years from now as the fleet truly transitions the market won’t be nearly as competitive, especially if the cities keep providing upzoning almost exclusively on land that includes gas stations, instead of more broadly.

What I was thinking is BC Hydro will control the "fuel" market.

[WarrenC12]

Originally Posted by MalcolmTucker

Yeah, prices will always be set based on the highest marginal price. That is how prices work. And everyone else gets to make the extra profit.

In oligopolies, yes.

[WarrenC12]

Originally Posted by whatnext

What I was thinking is BC Hydro will control the "fuel" market.

That will be pretty nice when everything is run transparently through BCUC and a Crown Corporation.

[whatnext]

Originally Posted by WarrenC12

That will be pretty nice when everything is run transparently through BCUC and a Crown Corporation.

Absolutely and they will be more subject to pressure on prices than Big Oil ever was. But it does mean we'll all be reliant on one provider (unless you have a house and garage with solar panels).

[cairnstone]

Originally Posted by whatnext

Absolutely and they will be more subject to pressure on prices than Big Oil ever was. But it does mean we'll all be reliant on one provider (unless you have a house and garage with solar panels).

You don't have to buy your power from Hydro. If you want to can pay slightly more and get certified green power

https://www.bullfrogpower.com/

[MalcolmTucker]

Originally Posted by WarrenC12

In oligopolies, yes.

In all markets with fungible goods - otherwise there is an arbitrage opportunity and the market will clear and settle at the marginal price. There is no reason to leave money on the table.

[SpongeG]

I filled up at 95.9 in GP today at Costco. Most places were 99.9 - 106.9