The Editor,
Re. “Gas prices stay high despite oil’s dive” (The Tri-City News, Aug. 14).
“I wish there was a simple explanation,” lamented Jason Parent of the Kent Marketing Group when asked why gasoline prices don’t seem to follow falling oil prices.
He explains that B.C.’s 17-cent-per-litre Translink tax and our carbon tax contribute to higher gas prices in B.C.
It’s all about supply and demand.
The falling loonie is partially to blame.
B.C. gas prices are tied to western U.S. prices, a circumstance that might be mitigated if B.C. got more gas from the Kinder Morgan pipeline.
Mr. Parent goes so far as to say that even if the price of crude oil goes down more following the lifting of Iran sanctions, we shouldn’t expect gasoline prices to follow.
Wow. I hope the price of oil doesn’t go down too much more or we won’t be able to afford to gas up.
I helpfully add a few go-to points Mr. Parent forgot to mention in his exposition about why gas prices don’t respond to lower crude oil prices: the paucity of refineries, prickly maintenance issues at Cherry Point, civil unrest in Venezuela, bad weather in the gulf, environmental extremism and myriad other unavoidable reasons why the price of gasoline doesn’t budge downward when oil prices plummet.
So, gas prices will never go down, regardless of how low the price of crude goes.
As Mr. Parent says: “There isn’t much of a relationship on a day-to-day basis between crude oil and retail gasoline.” And we’re silly to expect “gas to move in lockstep with crude oil.”
Mr. Parent’s logic might be more plausible had he offered even one bafflegab economic force that might keep the price at the pump from instantly skyrocketing at the mere rumour of a crude oil price increase — or before a long weekend.
Apparently, immutable laws of markets only apply when the price of crude oil goes down.
Gee, I wish there was a simple explanation.
Jim Nelson, Port Moody
