Gas Prices In Canada Hitting Record Highs, US$ 5.68 per Gallon, And They Can't Blame Obama

gas stationLloyd Alter/CC BY 2.0

Brian notes that 65% of Americans Blame Obama, Congress for High Gas Prices and SUV-Driving Congressmen Blame Obama for High Cost of Filling Up at the Pump, as if it is a socialist plot.

Yet up here north of the border, we have a Prime Minister who is a shill for the oil companies, a Minister of the Environment who calls opponents of the Keystone pipeline traitors, and a Minister of Natural Resources who claims anti-oil protesters "threaten to hijack our regulatory system to achieve their radical ideological agenda."

One would think that with a government so in the tank with Alberta and the oil industry, with so much stuff pouring out of the oil sands with no place to go, that our oil prices would be low or stable, wouldn't you? Instead, they just hit C$1.40 a litre, close to C$ 1.50 for hi test. The cheap place near where we live, at C$1.367/litre, translates to US$5.23/gallon. How can this be?

Gas Prices USA canada© gas buddy

In fact, outside of the difference in taxes, the cost of gas in Canada almost exactly parallels US prices, bump for bump, even though in Canada it's drill, baby drill from Newfoundland to Alberta. How can Obama do this to us? The answer is he didn't, because he can't control the price of gas. So why would prices be so high in Canada when we export the stuff?

The price is set on the world market.

Unless you are Hugo Chavez and nationalize the industry and subsidize your citizens, the price is set on the world market. In Canada there is no pipe from Alberta to Ontario, and oil is imported to the east coast. In Alberta, they pay a lot less for gas, like they do in the US midwest, because the Alberta and Dakota oil has nowhere to go.

The price on the world market is increasing because the world economy is recovering, which is a good thing.

There is more demand chasing the supply, so the price goes up. The funniest thing Michele Bachmann ever said (and she has said a lot) was back in November, 2008 when she said

"We saw gas at $2.04 today. That was my goal, when I started this year I wanted to get gas below two dollars a gallon and we are almost there..."

And how did she and her friends do it? By crashing the American economy into the biggest disaster since the great depression, driving down demand. That appears to be the Republican idea of an energy policy, because she said it again last year:

"Under President Bachmann, you will see gasoline come down below $2 a gallon again. That will happen."

Gas prices are high because the economy is recovering and everybody wants the stuff all over the world, period. And, guess what? Instead of hurting the economy, it might just help it. In another headline today's Globe and Mail,

Auto sales sizzle as recovery heats up: Numbers are the best since the recession as high gas prices spur American and Canadian drivers to seek new fuel-efficient vehicles.

“Fuel economy was the name of the game in March, as it had been in the first quarter,” Ken Czubay vice-president of U.S. marketing for Ford Motor Co., said on a conference call with analysts and reporters. “All customers, regardless of segment, are telling us they want fuel economy and performance.”

Don Johnson, vice-president of U.S. sales for General Motors Co., said the percentage of Americans buying GM vehicles with four-cylinder engines – the most fuel efficient the company offers – hit a record high of 42 per cent in March.

“There is definitely a general trend toward more fuel-efficient and sometimes smaller vehicles, but it is not what I would call a panic reaction to it,” Mr. Johnson told reporters and analysts.

It's That TIme Of Year

It is changeover time from winter gas to summer gas, which is more expensive to make. HowStuffWorks explains:

In order to reduce pollution, summer-blend fuels use different oxygenates, or fuel additives. These blends, the EPA claims, burn cleaner and also help compensate for a limited oil supply. The EPA says this practice of using seasonal blends also encourages the development of alternative fuels (Remember that gasoline isn't just made up of processed crude oil -- it's a blend of refined crude oil and different compounds and additives.)

Because They Can.

Good Friday is a statutory holiday in Canada, and prices always go up before a three day weekend. This year it is so warm that a lot of people are planning road trips that they usually do during the Victoria day weekend, six weeks from now. It is an early start on the summer rush.

In summary, north of the border, Canadians can't even use all the gas they have, the government gives the oil companies anything they want and tries to crush anyone, like Environmental Defence, who dare oppose it. Yet Canadian prices almost exactly track American ones. Of course, it's all Obama's fault. Go figure.

Gas Prices In Canada Hitting Record Highs, US$ 5.68 per Gallon, And They Can't Blame Obama
High gas prices are a result of high demand, period. You don't want a repeat of what happened the last time they were low.

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