Gas prices at the pumps

Posted 08.05.14

SHAWVILLE, QUEBEC | When I was in high school with my first car, gas prices were less than a dollar a gallon. That's right, per gallon. And at time Canada was producing almost no oil.

Our fuel was imported from the USA, Venezuela, the Middle East, the North Sea -- but not Canada. So here's my idiot's dilemma: Why is gas so much more expensive now that we have become the second or third largest oil producer in the world? If we have more oil here, shouldn't it be cheaper?

Domestic oil prices in Venezuela are around one cent per litre -- that's correct! In Cuba, which imports all its oil, gas prices are close to Aylmer's, $1.40 per litre.

Big Oil will tell us prices are set internationally, so that what happens in individual countries is irrelevant. Canada may produce all the oil in the world, but if it has to be shipped, piped, or railroaded elsewhere, refined elsewhere, and if it has to go through the international system of futures trading and other speculation, that takes oil prices out of [the control of] individual countries.

However, as soon as Iraq was invaded by the US, Libya was invaded, Syria fell apart, and ISIS came on the scene, prices at the pumps shot up -- and we were told by the energy corporations that these higher prices are due to conditions in Iraq, Libya or wherever.

Aren't these nations? Aren't these national events? Why do these wars or attacks affect prices, when massive oil finds off Newfoundland and Labrador, and especially in the Tar Stands, do not affect oil prices?

There's a disconnect here. It sure looks like we are being lied to. So why accept such lies, and why listen to the 'liars' parties' with their 'explanantions?'

High oil prices also drive up the value of the local currency. Our dollar has hit today's heights -- thanks to oil production here (not around the world). A high dollar means our exports suffer, and yes, exactly that has happened -- everyone expected higher exports the first quarter of this year, and yet they fell -- explained by a high dollar. This is one of those benefits of high oil prices?

Lastly, oil prices seem to many analysts linked to speculation by oil traders who are gambling on future oil prices. They are gambling that oil prices will rise.

The head of the Organization of Petroleum Exporting Countries, Abdullah Al-Badry, said recently market speculation is to blame for the increase in prices since Iraq is 'still producing as normal,' with 95 percent of its capacity in the country's south unaffected by the violence.

This is good for us?

We should support a system that increases our living costs, drives down exports, and fattens up speculators in London and New York? We should support new pipelines, to strengthen this system? We should support the political parties in next year's federal election who brought all this about?


Copyright © 2014 Fred Ryan/Log Cabin Chronicles/08.14