NDP motions for action on gas gouging

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Mighty Middle
NDP motions for action on gas gouging

Timmins-James Bay MP Charlie Angus says ongoing price gouging at the pumps requires action. Angus is supporting two motions from Windsor-West MP Brian Masse to protect consumers at the pumps.

Masse currently has two motions before Parliament that would provide accountability at the pumps for consumers. First, the creation of a Petroleum Monitoring Agency would oversee gas prices across Canada and report directly to Parliament to address questions of potential gouging.

Masse is also proposing the creation of an Oil and Gas Ombudsman to investigate complaints from Canadian consumers regarding gouging, follow through with independent investigations and report back to Parliament with their findings and compliance.

Angus says northerners are particularly vulnerable to high gas prices.

"People in the north generally have to travel longer distances. There is little competition for gas outlets and people know that they are getting hosed at the pumps. They are fed up, and they expect their government to do something about the price gouging going on at the gas pumps. The NDP has spoken on this issue for years. It's now time for the Liberal government to support accountable energy pricing."

This past December, MPP Gilles Bisson (Timmons-James Bay) also introduced a bill in the Ontario Legislature bill that would have saved Ontario families from gasoline price gouging.

https://www.timminstoday.com/local-news/charlie-supports-ndp-motions-for...

Martin N.

Isn't this the goal of activists? Now they whine about high gas prices caused by 'gouging' when the problems exist much closer to themselves. Peddling a bicycle is much healthier and better for the earth.

Hey! Perhaps Energy East wasn't such a bad idea after all. 

Pondering

Martin N. wrote:

Isn't this the goal of activists? Now they whine about high gas prices caused by 'gouging' when the problems exist much closer to themselves. Peddling a bicycle is much healthier and better for the earth.

Hey! Perhaps Energy East wasn't such a bad idea after all. 

What does EE have to do with it? There is no shortage. Business usually charge the most the market will bear. For a necessity like fuel that can lead to unreasonably high prices. It's a great idea to have some federal oversight.

Martin N.

Pondering wrote:

Martin N. wrote:

Isn't this the goal of activists? Now they whine about high gas prices caused by 'gouging' when the problems exist much closer to themselves. Peddling a bicycle is much healthier and better for the earth.

Hey! Perhaps Energy East wasn't such a bad idea after all. 

What does EE have to do with it? There is no shortage. Business usually charge the most the market will bear. For a necessity like fuel that can lead to unreasonably high prices. It's a great idea to have some federal oversight.

Its called competition. A free market will establish a competitive price while government interference just adds costs.

EE will add competition and a competitive market as opposed to a captive market.

There have already been innumerable studies on gas price 'gouging' that explains the complexities of the issue. The 'gouging' in the hinterlands usually boils down to high costs and low turnover. Feel free to haul your own fuel from a lower cost jurisdiction if you find that others refuse to work for little reward.

Pondering

Martin N. wrote:
Its called competition. A free market will establish a competitive price while government interference just adds costs.

EE will add competition and a competitive market as opposed to a captive market.

There have already been innumerable studies on gas price 'gouging' that explains the complexities of the issue. The 'gouging' in the hinterlands usually boils down to high costs and low turnover. Feel free to haul your own fuel from a lower cost jurisdiction if you find that others refuse to work for little reward.

That isn't how the oil market works. Gas goes up when the price of a barrel goes up, but when the cost of a barrel goes down the price of gas doesn't. 

EE was a threat to the environment. Certainly not something we would allow in the hopes that gas prices might go down some day. 

When the free market doesn't work government, who represents the people, steps in. That seems perfectly appropriate to me.

Caissa

Aren't gas prices a provincial issue/ they are sent weekly by the province in NB.

Mr. Magoo Mr. Magoo's picture

Quote:
That isn't how the oil market works. Gas goes up when the price of a barrel goes up, but when the cost of a barrel goes down the price of gas doesn't.

And yet prices do go down sometimes.  Any thoughts on why?

Quote:
When the free market doesn't work government, who represents the people, steps in. That seems perfectly appropriate to me.

Well, it's definitely appropriate for the government to, for example, prevent "rival" companies from colluding to artificially inflate prices.

But the government simply saying "the people" don't want to pay that much for their gas, so we'll set the price from now on" just leads to a condition known as "Venezuela".

cco

Or "Kuwait".

Mighty Middle

Wrong post

Mr. Magoo Mr. Magoo's picture

Quote:
Or "Kuwait".

Not sure I follow.  Did Kuwait also artificially set prices?

progressive17 progressive17's picture

The gasoline market is not the oil market. No matter how much oil Alberta wants to pump into the Pacific Ocean, it would not affect the Vancouver gasoline market one iota. Once oil is turned into gasoline and all the other wonderful items it can make, it has a completely different distribution network than the crude.

Vancouver is in the Pacific gasoline market, which includes LA, San Franciso, and Seattle. The demand always exceeds the supply. You have to pay a lot, unless you can refine your own at home. Vancouver gasoline prices are now 20 cents higher than Montreal. Supply and demand determines more of this than politics.

Mr. Magoo Mr. Magoo's picture

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Vancouver is in the Pacific gasoline market, which includes LA, San Franciso, and Seattle. The demand always exceeds the supply.

Presumably, the government could intervene on behalf of The People, either by setting artificially low prices by fiat, or by telling the people "Jesus Christ, can you please just stop demanding so much?  Could you ride your bike or take the bus just ONE day a week???"

At the same time, though, didn't B.C. just have the highest gas price in North America?  What, specifically, is the supply problem?  Because if every gas station is receiving all the gas they can sell (and assuming they're not colluding) then the market price shouldn't set a record.

And one gas station owner saying "fuck it... I'm going to arbitrarily set the prices high enough to buy that boat I've been wanting" should be easily thwarted by his/her competition not raising their prices.

When I was in university, so many years ago, I worked for a while at a gas station.  It fascinated me how many people moaned and groaned about the price of gas, and pointed out to me that some other station only a few miles away apparently had gas for 0.1 cents per litre less.  So, on a 30 litre fill up, that could save you three cents.  And you'd only need to burn four cents worth of gas to drive there.  This, from people who'd surely pay an extra buck to buy milk at their local convenience store because they don't have time to look for "bargains" and they just need milk, immediately.

Substitute almost any other thing for milk, if you'd like.  But the truth is I can pinch a nickel so hard the beaver shits.  And even I don't go out of my way (either by walking a few extra miles, or whining) over three cents.

progressive17 progressive17's picture

There is nothing that Vancouver can do locally to change the wholesale price on the spot market for gasoline. If the government were to set a price which was lower than the spot price, no one would sell them the gasoline. If the government said it would make up the difference, there would then be rationing when the government ran out of money.

Some 80 million cars will be sold in 2018, and it would not matter if Vancouver ordered all its drivers not to drive at all.

The sad fact is that the number of cars on the planet is rising by 7% a year, and the amount of gasoline refined is only going up by 1.25% per year. There is a structural supply and demand problem for gasoline, which can only be solved by refining more gasoline, or accepting an inevitable price increase of about 6% a year.

As oil is rapidly being depleted, it has a sense of millions of lemmings driving off a cliff...

Rev Pesky

From Mr. Magoo:

But the truth is I can pinch a nickel so hard the beaver shits. 

Well, that wasn't exactly blowing coffee out my nose, but it was pretty funny nevertheless. Thanks for my evening grin.

But now I have a picture in my mind of you cleaning out your change purse...

 

LB Cultured Thought

Pondering wrote:

 There is no shortage. Business usually charge the most the market will bear. For a necessity like fuel that can lead to unreasonably high prices. It's a great idea to have some federal oversight.

The rack price in Vancouver is usually more than 0.20 $/L over the rack price in Edmonton. It's almost as if there is some kind of supply bottleneck that raises prices in the Vancouver area! Although, you are correct in asserting it is what the market will bear; if people wanted lower gasoline prices they might allow say...a pipeline to reduce the bottlenecks.

NorthReport

This happens quite often apparently 

Unbiased oil analysts laugh at people expecting something can be done Gasoline prices are up everywhere and will probably drop a bit everywhere in the Fall 

cco

Mr. Magoo wrote:

Quote:
Or "Kuwait".

Not sure I follow.  Did Kuwait also artificially set prices?

Yes. It's been around 20 cents/liter there for decades, with a recent hike to 28 cents.

Not to put a spoke in the wheels of "Government intervention in the economy leads to NATIONALIZED BARBERSHOPS and worthless currency and dictatorship!", or anything. Most oil-producing countries (including Saudi Arabia, Russia, and Mexico) do in fact have a subsidized lower domestic price for gasoline, and some importers (India, China, Indonesia) do too. It's no more a violation of the immutable laws of Milton Friedman than Québec's cheap domestic hydro rates are.

Mr. Magoo Mr. Magoo's picture

Ah, fair enough.  Nothing wrong with subsidy.

Martin N.

NorthReport wrote:

This happens quite often apparently 

Unbiased oil analysts laugh at people expecting something can be done Gasoline prices are up everywhere and will probably drop a bit everywhere in the Fall 

Einstein's definition of insanity: having another study of 'gas gouging' and expecting a different result from the last study. 

Informing the ignoramuses that demand action on 'gas gouging' is a better option but, you can't fix stupid. Medicating crazy is possible, though.

Martin N.

Mr. Magoo wrote:

Ah, fair enough.  Nothing wrong with subsidy.

Isnt all government largesse a subsidy? Whether artificially lowered gasoline prices or daycare, healthcare, Hydro or whatever?

It is more the universality of the 'subsidy' or, its fairness that matters.

Martin N.

I suppose it is prescient of Wilkinson to keep quiet and allow the NDP clown car to tow its own circus about but eventually, Wilkinson needs to lead his party on the issues.

To me, the premier issue is finding long term solutions to inherent concerns based upon good policy rather than knee jerk appeasement of vocal minorities. In other words, do not appear like Eby, Mungall or, gord forbid, Popham - driving the clown car in circles, looking for their own circus. Horgan appears to have a considerable store of low cunning but he is constantly dipping into it to extract his henchpersons from their own predicaments.

Mr. Magoo Mr. Magoo's picture

Quote:
Isnt all government largesse a subsidy? Whether artificially lowered gasoline prices or daycare, healthcare, Hydro or whatever?

I suppose we could look at it that way.  I've seen our health care system described as "subsidized health care", but the system is more of a public insurance policy, IMHO.  It's not as though we pay what we can for that chest X-ray and the government pays the rest.

Personally, I'd reserve "subsidy" for when the government covers the difference between what something costs, and what they think it should cost (which could include, for example, even "farm subsidies" where the government pays a farmer what their harvest "should be worth" rather than market value).

I wonder, though, how many of the countries that subsidize gasoline have also nationalized it, at least to some extent.

At that point it's a subsidy only if they choose to sell it at less than their cost to produce it.  They're not giving money to private industry, they're either foregoing a profit (selling it for their cost) or actively adding money to the deal (selling it for less than their cost).  In the first case, we still might call it subsidized since they forego a profit, but if they sell it for less than market value, well, maybe we'd need a different word for that then. 

I think the three problems with the government subsidizing gasoline in Canada would be:

1.  do we want taxpayer revenues going to "Big Oil"?

2. is making gasoline cheaper (and therefore private vehicle use cheaper) environmentally sensible?

3. should the subsidy only kick in where prices are high?

and...

3a:  if they only kick in where prices are high, why should Big Oil not just hike the prices whenever and wherever they want, knowing the government will cover the gap?

cco

Nationalizing the sector would sure help with that. But as has been discussed in other threads, it wouldn't fix the problem of how awkward the price signal is as a tool to achieve contradictory aims. We want people to drive less, but there's not currently a way to make gas cost $15/L for Doug Ford and 20¢/L for the immigrant family commuting to downtown Toronto from Kitchener, the only place they could afford to live.

progressive17 progressive17's picture

Hydro Quebec returns almost $1 billion to the Quebec government every year. Plus they dish lots out for cultural events across Quebec. Is Hydro Quebec subsidizing the Quebec taxpayer?

Ontario pays Hydro Quebec to take Ontario's surplus energy, and then Hydro Quebec sells it on to the States for a profit. Hydro Quebec is very good for National Unity. It facilitates interprovincial and international trade, all at a profit.

Mr. Magoo Mr. Magoo's picture

Quote:
We want people to drive less, but there's not currently a way to make gas cost $15/L for Doug Ford and 20¢/L for the immigrant family commuting to downtown Toronto from Kitchener, the only place they could afford to live.

Why is that hypothetical family commuting to Toronto from KITCHENER?

Is it better salaries?

Wouldn't Guelph be closer?

As for Doug Ford, would even taking the TTC work out to much less (everything considered) than 20 cents a litre? 

It's funny that you'd choose that example.  When I was a kid, living in Sarnia, 20 cents a litre was the "new" price when we switched to metric.  Or maybe 20.2 cents, but close enough.

cco

Mr. Magoo wrote:

Why is that hypothetical family commuting to Toronto from KITCHENER?

Is it better salaries?

Wouldn't Guelph be closer?

I almost typed Guelph, but decided at the last minute to pick Kitchener based on a family I met while on vacation a few months ago.

Quote:

As for Doug Ford, would even taking the TTC work out to much less (everything considered) than 20 cents a litre? 

Depends on the fares, surely.