Motorists sing the gas-price blues - Prices at the pump continue to jump
www.guelphmercury.com Thursday March 13, 2003 VIK KIRSCH MERCURY STAFF
GUELPH -- Guelphites woke up Wednesday to sky-high gasoline prices.
"Pumping it in I had a bit of a shock," Chris McCracken said as he gassed up his minivan at the Canadian Tire self-serve gas bar on Woodlawn Road.
At a pricey 83.4 cents a litre, he yanked the nozzle out at $15, kicking himself for not filling up several days earlier when gasoline was less than 80 cents.
He wasn't buying the argument that an impending war with oil-rich Iraq is driving gas prices up, saying they fluctuate too much for that to be the simple explanation.
But that's what Canadian Petroleum Products Institute Ontario vice-president Bob Clapp was suggesting.
"It's the threat of war," said Clapp, conceding this is cold comfort to Canadian families facing expensive refueling costs for their SUVs and vans.
"We can certainly understand people's frustrations."
Driving this irritation is the rise of regular gasoline prices Tuesday to record highs averaging 84.2 cents a litre across Canada, up almost three cents over the past week. That's amid decade-high crude oil prices, which surged more than $1 US a barrel Wednesday to almost $38. Diesel, propane and furnace oil also peaked: diesel chugged to 84.4 cents Cdn, propane rose to 66.4 cents and heating oil floated to 77.5 cents.
Susan Dankert recalls how diesel fuel was once cheaper than gasoline.
"Now, it's right on par," said the partner in Choice Transportation Services, a Guelph company whose large truck rigs haul commercial freight.
Her trucking firm is among the lucky ones that can pass some of the higher costs on to customers through a fuel surcharge. And while that doesn't completely cover rising costs, she is more concerned for independent truckers driving their own rigs who aren't in a position to pass on some of the added expense.
The worry, said Guelph Chamber of Commerce president Ian Smith, is what damage rising energy costs are doing to the economy. It's not just the trucking sector passing along energy surcharges, Smith said. He cited airlines and Canada Post as well.
It's ironic, he said, that the Bank of Canada recently raised interest rates to combat oil-related inflation that is out of the hands of Canadians. (His last home hydro bill, he said, "was obscene," estimating it's almost 50 per cent higher than a year ago.)
Dankert proposes the federal government re-evaluate high gasoline taxes when crude prices soar.
Among the demons said to haunt oil -- aside from Iraqi dictator Saddam Hussein -- are production shortfalls in strife-torn, oil rich Venezuela and an unusually long and harsh winter in North America, though an oil industry-tracking Internet site (www.oil-gasoline.com) isn't buying it.
The Web site concludes the refining industry is "devoid of competition." Refiners are not replenishing inventories because they expect prices to drop.
Crude prices, the site said, are high because of significant costs to the industry from speculating in the commodity, with refiners passing on these costs to consumers.
That doesn't surprise Consumers Association of Canada Ontario president Theresa Courneyea, who is convinced high prices are driven by the refining industry. She said regular gasoline prices in her home town of Toronto were in the 75- to 76-cents a litre range at one point Monday. Two hours later, prices at those gas stations had risen to 83.9. "Nobody can tell me that just happens accidentally."
"The trouble is there are so many things happening at once," said Peter Dyne, the consumers association's oil expert. "What we are seeing is the workings of an open market, reasonably competitive."
What's impossible to gauge are the reasons prices are peaking and when, or if, they'll come down. "I can't offer you any comfort," said Dyne.
If motorists feel they're gouged by high taxes, Dyne said it doesn't reflect the reality that they pay among the lowest in the industrialized world.
"Gasoline is taxed heavily everywhere," said Dyne.