Where Does The Money We All Pay For Our Gas Go?

The other day, in a moment of inexplicable bewilderment, (and while filling up at the local Suncor, Canada’s gas station…. sure), my glassy eyed stare began to focus on that sticker on the pump, my glassy eyed stare began to focus on that sticker on the pump that pie charts the costs that go into a litre of gas. You know the one.  The cost of crude, refining, retailer margin, federal and provincial taxes and so on…. you say tomato I say tomahhhto.


The thing that got me was the level of taxes that the various governments take for doing nothing.


For example, the retail pump price in Toronto at the time of this report is $1.329/L while the rack price is $0.8530/L so a $0.48/L difference. Let’s allow $0.08/L as a gross retail margin to cover all expenses.


That means that the governments take $0.40/L effortlessly and swiftly out of our wallets.


Seems to me the sticker on the pump should be a picture of our federal or provincial MPs!


Ah, but there is relief in sight as the annual provincial premier’s conference in PEI has confirmed that they all have confirmed (they do a lot of confirming and posing) that they all agreed to a national energy strategy. Call me confused, but why wasn’t the Harper contingent involved in this meeting and confirmation?


Inter-provincial transfer of commodities such as grain, iron ore, potash, and crude oil falls under federal jurisdiction.


Then I really got confused.


While I admire the premiers for their decision on a national energy structure, it is useless when gauging national interest against local concerns, especially when the local concerns are voiced by ill-informed environmental radicals supported by a left-leaning media and flowers-in-my-lapel politicians.


Cases in point:


Kinder Morgan has been applying to double the capacity of its Trans Mountain pipeline from 300,000 to 890,000 bpd. The Edmonton to Burnaby line has been operating perfectly for 60 years until the Burnaby mayor and his council decided to ignore all attempts by Kinder Morgan to discuss the project, which has been approved by the federal government that again has final say on inter-provincial crude oil movements.


Call me grumpy, it wouldn’t be the first time, but Burnaby would not even exist if it weren’t for the Chevron refinery and the tax revenue it brings in to pay for the salaries of the mayor and his council.


So much for the national energy strategy!


I also see that Nova Scotia has banned all on-shore fracking for natural gas and crude. This goes along with the position taken by New Brunswick and Quebec — both have bowed to concerns of Aboriginal peoples to a certain extent, but more to the frothing at the mouth environmental fraternity who claim that fracking “would” cause water contamination and “could” cause earthquakes.


Woulda…………… coulda!


Coulda had a national energy strategy, but nope.


~ The Grouch


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Roger McKnight is the Chief Petroleum Analyst with En-Pro International Inc.
Roger has over 25 years experience in the oil industry, and has held senior marketing management positions responsible for national and international accounts. He is the originator of the card lock concept of marketing on-road diesel that is now the predominant purchase method of diesel in Canada. Roger's knowledge of the oil industry in North America, and pricing structures has resulted in his expertise being sought as a commentator by local, national, and international media. Roger is a regular guest on radio and television programs, and he is quoted regularly in newspapers and magazines across Canada.

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