Canada Gas Prices: Pain At The Pumps Fuels Calls For Gas Boycott
Is it time to boycott gas stations?
That’s what some consumers and gas-price watchers are urging in the wake of another large gas-price jump across Canada this week.
Gas prices reached 140.1 cents per litre in Toronto and 147.9 in Montreal Wednesday morning, and rose between a penny and 4 cents per litre across the country. They are now 8 per cent higher than they were at this time last year, even though oil prices are slightly lower than they were in April of 2011.
And this week’s jump is just the beginning, say forecasters who expect to see more record-high prices at the pumps this month and next.
Gas price watcher Dan McTeague says the oil industry usually tries to explain the increase by saying it's to cover the cost of converting from winter to summer fuel.
But McTeague, a former Liberal member of Parliament and a harsh critic of the oil industry who runs the website Tomorrow's Gas Price Today, calls that a "lame and well-worn excuse."
He says fuel specifications in Canada — unlike the U.S. — don't change with the seasons.
David Detomasi, an assistant professor of international business at Queen's University in Kingston, Ont., calls the latest increases "pretty shocking." For the most part, he says, there's no reasonable explanation.
En Pro oil price analyst Roger McKnight told the National Post he expects drivers in Ontario to experience all-time high gas prices this month.
Gas prices usually rise in the spring as refineries shut down to convert from producing diesel to gasoline as the summer driving and vacation months approach. This year, however, shutdowns of four refineries in Pennsylvania and five in Europe have severely cut North American supplies, McKnight said.
A former employee of Texaco and Esso, he told the Toronto Star he thinks a boycott of gas companies would be “a great idea.”
“That’s the way to do it,” he said. “That will force them to lower their prices and everybody else will follow.”
In recent days, a chain email has been circulating urging Canadians to boycott the two largest gas retailers in the country -- Esso and Suncor-owned Petro Canada -- starting on May 1.
“We need to take aggressive action to teach them that BUYERS control the marketplace, not sellers,” the email states, setting as its goal a return to one-dollar-a-litre gas.
Another boycott call, this one international, calls for drivers not to buy any gas from any retailer on April 15.
“In April 1997, there was a ‘gas out’ conducted nationwide in protest of gas prices. Gasoline prices dropped 30 cents a gallon overnight,” the boycott campaign, which is circulating online, claims in its letter.
But the website Snopes.com declares this assertion to be “false.”
“Gas-outs” have been proposed before, but have largely fizzled, Snopes argues, “because consumers not buying gasoline on one particular day doesn’t affect oil companies at all.” In order to affect gas prices, consumers would have to place sustained pressure over time on retailers, or reduce their consumption of gas overall.
McTeague's website includes these other price increase forecasts per litre in Canada compared to a year earlier:
- Ottawa: 133.7 cents (126.4).
- Winnipeg: 115.9 cents (113.9).
- Calgary: 113.9 cents (110.9).
- Vancouver: 143.2 cents (135.3).
-- With files from The Canadian PressWHAT'S BEHIND THE PRICE OF GAS?
1. Crude Oil Prices
It starts with crude oil. Although Canada may produce more oil than it consumes, the country is at the mercy of global markets for the commodity. Increased Middle East instability, sparked by popular uprisings, has lead to concerns about supply. Better-than-expected economic growth, especially in developing nations such as China and India, has also increased demand. (AP Photo/Hasan Jamali)
2. Refining Oil into Gas
The next link in the supply chain is refining. In order to turn thick, black crude oil into useful products such as gasoline, diesel, heating oil and jet fuel, it must be sent through a mind-boggling array of pipes and tanks, heaters and condensers to sort the components of the substance from lightest to heaviest. This is a complex and costly process, and is paid for by what is known as the "crack spread," or refining margin. This represents the difference between prices fetched for the products produced, and the cost of crude oil inputs.. (AP File Photo)
3. Transportation to Retailers
Once the oil has been refined into gasoline, it must be transported to retail outlets across the country. This is accomplished through a network of 23 terminals - from St. John's to Nanaimo, B.C. -- forming the backbone of the distribution network. (AP Photo/Jessica Hill)
4. Retail Mark-Up
The retail mark-up averaged 7.6 cents per litre in April. This national average masks wide variation, from lows of 4.6 cents in Calgary up to highs of 25.8 cents in Whitehorse, according to Kent Marketing Services, an industry consulting group. (AP Photo/Orlin Wagner)
5.Taxes at the Pump
Emily Corbett of Mechanicville, N.Y., pump gas at a station in Mechanicville, on Wednesday, May 11, 2011. New York, Indiana, Illinois and New Hampshire are among the first states talking about temporarily suspending part or all of the state and local taxes that can add 14 cents to nearly 50 cents to a gallon of gas. (AP Photo/Mike Groll)