What's Behind High Gas Prices?
Canadian Centre for Policy Alternatives - According to an analysis by economist Hugh Mackenzie released today by the Canadian Centre for Policy Alternatives, the Canadian oil industry has been taking advantage of public fear prompted by the devastating hurricanes in the United States and charging more than was justified by the increase in raw material costs.
www.policyalternatives.ca
Date: Fri, 30 Sep 2005 15:19:31 -0400
Subject: New from the CCPA
From: Canadian Centre for Policy Alternatives <ccpa@policyalternatives.ca>
New from the Canadian Centre for Policy Alternatives
September 30, 2005
Whats Behind High Gas Prices?
By Hugh Mackenzie
Yesterday the CCPA released Whats Behind High Gas Prices?, a short analysis of the current gas price spike by economist and CCPA Research Associate Hugh Mackenzie that sparked numerous news stories across the country. The news release for the report is pasted below. The whole report can be downloaded from the CCPA web site: http://www.policyalternatives.ca
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FOR IMMEDIATE RELEASE
SEPTEMBER 29, 2005
High gas prices unjustifiedreport
OTTAWAThe recent spike in gas prices constitutes nothing short of price-gouging on the part of the oil industry.
According to an analysis by economist Hugh Mackenzie released today by the Canadian Centre for Policy Alternatives, the Canadian oil industry has been taking advantage of public fear prompted by the devastating hurricanes in the United States and charging more than was justified by the increase in raw material costs.
Mackenzie looks at whats behind the current high gas prices and finds that taxes have virtually nothing to do with the increased price in gas because, with the exception of the GST, all provincial and federal gasoline taxes are flat amounts per litre and dont go up when crude prices go up.
While the price of crude oil has gone up, Mackenzies calculations find a 7-9¢ per-litre increase would have matched the crude oil price increase. The 15¢ increase were now paying is profiteering, he says. And the 40¢ increase we were paying over the Labour Day weekend was just plain gouging.
According to Mackenzie a reasonable price for gas in Ontario would be 95¢ per litre, about 10¢ less than the current price. A 10¢ per litre difference may not sound like much but every penny per litre generates an additional $1.1 million for the industry every day.
For the period around Labour Day, when the difference between the price and what would have been justified by crude oil prices was much greater as much as 45¢ per litre at the peak the industry was bringing in $49.5 million in excess profits a day, Mackenzie concludes.
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Whats Behind High Gas Prices? is available on the CCPA web site at http://www.policyalternatives.ca
For more information contact Kerri-Anne Finn, CCPA Communications Officer, at 613-563-1341 x306.
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Canadian Centre for Policy Alternatives
410-75 Albert Street, Ottawa ON K1P 5E7
tel: 613-563-1341 fax: 613-233-1458
http://www.policyalternatives.ca
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