Monday, October 03, 2005

Gas prices

Once again I witness the strange dance of gas prices here in Quebec city. Just before the week end gas prices climbed up by 15 cents and now that the week ends over the gas price fell down 5 cents for a net increase of 10 cents. Why did the gas increase in the first place? I like most people have no idea, however they cannot claim lowered supplies nothing happened in the worlds thursday to limit the amoungt of fuel we had availlable (what you say the huricains around the coast of the Mexican gulf? sorry but prices already increased to reflect the lowering of supplies caused by thoses huricain. A increase in prices that happened before we knew the full extant of the damage I might add). They cannot claim an increased demande in Quebec city, this was a perfectly normal week-end, no holyday, no start of school no nothing. If nothing changed, no reducing of supplies no increase of demande, no change in any factor that would logically increase the prices of something why does the prices continu to increase?

Well after looking at the Regie of Energy web site I found some answer... First here in quebec the price of gas is regulated by this organism that set up the minimum price a liter of gas can be sold (at the moment it is something around 55 cents before transport and taxes), then there is taxes of fuel, taxes that are weirdly distributed (according to the data I found, for quebec city there is 25 cents of taxes on every litter of gas... 25 cents that about 1/4 of the prices), then you have to transport the gas... through truck that need gas so every increase in gas price increase the amougt you pay for transport which increase gas price (vicious cycle ain't it?) and finally you get the sales taxes, because of course gas is taxed TWICE!, 7% for the federal gov and 7,5% for the provincial gov. Add to that the profits by the detaillant and you get gas price in the 1.19$ range for today.

Now I understand how the gas can cost that much, there are two factors I found annoying, the minimal price and the 25 cent fuel taxes. We have a sell taxe that applies on gas and the minimum price isn't really helping anyone since I see more and more gas station closing (the mimimum price was supposed to protect small vendor by preventing price wars). And the governement keep saying that the increase in gas price is costing him incredible amougts of money so obviously the 25 cents taxe isn't helping and the sales taxes are adding oil to the fire so to speak.

I belive it is time to cuts taxes on gas and to remove the minimum price artificial limit, the price of gas influence all aspect of our lifes directly or indirectly. When gas price increase we end up paying more for gas but also for food, bus fares, cd, and just about every other goods as our society is complety dependant on gas. We know that until an alternative is found gas consomption will remain about the same (a study in the US has found that people would not change their habits as long as gas price did not reach AND stay at 4$ a gallon), so I think it is time to cut the people some slack and encourage with all our resources new fuel sources research... Research that would include environmental impact before we set it loose this time, hopefully that would give us the chance to escape the green house disaster that are billions of cars.

3 comments:

Piccolo said...

I agree with you. And one thing who is ridicul to is that hybrid vehicules can cost about 10 000$ more than an ordinary car!!! Lower the price of hybrid cars, there will be less demand for the gas and prices could go down to!

anyflower said...

I agree too! If I could afford it, I'd be the next Toyota Prius buyer. Until I get enough money for it, I'll ride my Tercel and dream of the charming Mazda 3...

Piccolo said...

That's absolutely the same for me, except that I'm riding a big malibu... But I can't sell it at a price who will help me buy a car who drink less!!! But the Mazda 3... Or even more, the Mazda 6!!!