Filling Tanks Emptying Wallets

Over the past several weeks, Toronto drivers have been noticing the price of gas steadily rise. Somewhere around the $1.07 per litre mark at the time of this writing, gas prices seem to be consistently travelling farther north of the dollar mark. Many Canadians remember a time not too long ago when a litre of gas went for less than a buck.

Yesterday, QMI Agency’s Stefania Moretti weighed in on this subject by revealing that Canadians seem to be paying upwards of 30 cents more per litre of gasoline than their American counterparts. What Canadians are finding especially troubling about his discrepancy is that the United States gets quite a lot of its gas shipped in from Canada.

As Moretti writes, Canada is second only to Saudi Arabia for being home to the world’s largest oil reserves. As well, the Canadian and American dollars are pretty much at parity at the current time. So what’s the deal with having Canucks pay so much more at the pumps for gas that Canada has produced itself?

Oil companies claim that the answer comes through the taxes that Canadians pay. However, Moretti notes that Petro-Canada data has shown that in 2007, only 32 per cent of gas prices were designated for taxes. Dan McTeague, a “self-proclaimed gas-price-watcher” believes that higher taxes in Canada don’t tell the entire story.

Said McTeague: “The Americans have tax, too, but they have something we don’t have in Canada: competition at the refinery level…It’s not a conspiracy.” Instead, McTeague believes that the problem with gas prices in Canada has more to do with the fact that Canadian gas retailers are actually buying their fuel from U.S. suppliers.

Refineries in Canada, he says, are closing up shop. American refineries then attach an additional surcharge of up to 6 cents per litre due to the lack of competition at the wholesale level. So although the Canadian loonie and the American greenback are pretty much equals, Canadians are not being treated fairly at the pumps.

Basically, adds McTeague, Canucks are paying a 10 per cent premium on their own fuel. It doesn’t help that there is no level of government that is stepping in to do anything about the issue. McTeague suggests a “weekly public inventory report, similar to the one published every Wednesday south of the border, to take speculation out of the market.”

Providing information on supply levels, demand and prices across the market, such a report would potentially help Canadians to no longer get ripped off when filling their tanks. Said McTeague: “We haven’t the foggiest idea what the supply, demand picture is in this country and as a result we are really told what the price is going to be.”