Our constant complaining about the weather has gotten depressing. Let’s complain about the price of gasoline instead.
We in Alberta enjoy — if that’s an accurate term — the cheapest gasoline in Canada. If you get sticker shock at our current price of roughly $1.18 per liter, think about the residents of Toronto or Vancouver who were paying $1.24 and $1.38 respectively this week.
Remember, when it comes to gasoline and the weather, it’s not about how much you are suffering, it’s about how other people are suffering worse someplace else.
But here’s the kicker: we in Canada are the Someplace Else. In weather, and in gasoline prices.
The most expensive gas in the United States is found in Hawaii. It’s obvious why. The islands are remote; there are no petrochemical reserves for thousands of kilometers. All their gasoline arrives by tanker, as does all the diesel fuel they burn for their electricity.
That would make Hawaii the U.S. energy equivalent of our far north. Except for the weather. Except for the price of fuel.
The price for regular in Yellowknife was listed at $1.34, making their price on par with balmy Vancouver — and far more costly than on the island paradise.
The most expensive gas in the United States was US$4.28 per gallon this week. Translated into a price per liter, and accounting for the difference in our currencies, it comes to something like CDN$1.12.
Right now, there isn’t a Canadian cruising the pumps in our Someplace Else who wouldn’t line up to buy gas at $1.12 a liter.
Obviously, an Albertan is entitled to ask why the crude that powers the United States (ours) is converted to gasoline so much cheaper there, than it is here.
The answer is also obvious. Alberta has the lowest gasoline taxes in Canada, and that’s why we have the cheapest Canadian gas. About 26 per cent of the price of fuel in Alberta is taxes; federal, provincial and GST. Averaged nationally, taxes make up about 32 per cent of the price of gasoline.
Remove the cost of taxes from the price of regular unleaded all over North America, and you will find the price of gasoline is very nearly the same all over North America (Hawaii, and Canada’s far north excluded).
This becomes important in the light of the recent increase in prices, and the national debate over tax policies in our federal election.
When the price in Alberta jumped to $1.18, CBC Radio reported the increase amounted to the equivalent of an across-the-board income tax hike of $1,000.
Just like the effect of a flat income tax, this increase hits the bottom half of the income ladder the hardest. These are the people who must make the hardest decisions when prices rise.
We learned in the last gasoline price spike years ago that there is no price-versus-demand ratio for gasoline. No matter what the price, demand stays more or less the same.
In fact, in Alberta and P.E.I., gasoline sales actually increased slightly during that last price spike. The only place in Canada where sales declined at that time was in Saskatchewan, according to Statistics Canada.
CBC Radio also reported that 30 per cent of all energy use in Canada is by consumers, and fully half of that energy use total is gasoline. If there is any potential for elasticity in demand, it would be among individual consumers, since it would be easy for us to consume less, with only moderate adjustments to lifestyle.
Yet, obviously, that isn’t happening. Consumer studies suggest an Alberta price of $1.40 or higher would be the threshold to a change in our wasteful driving habits.
That, or a move to Hawaii, where the weather is nicer, and the gasoline cheaper.
Greg Neiman is an Advocate editor.