Wednesday, May 11, 2011

Gas Pain and Tax Pain

Local Toronto media have made a big issue of the price of gasoline in the last few weeks. I'm sure prices have risen everywhere in the US and Canada of late. In fact the price of gas seems unrelated to the price of a barrel of oil now. Why? Gas is refined from oil, and about a dozen refineries along the Mississippi River that control more than13% of American refining capacity are in danger of being flooded by the river (see graphic). Just the threat of less supply, with constant demand equals rising price, simple economics. But the whining media instead of explaining the story seems content with stirring the pot. Why not have government regulate gasoline? How can we help you squeeze more mileage out of your tank, and on and on? There are even stories about how consumers will have to choose between basic household necessities and filling their gas tank? At least they have a choice and once the flood threat dissipates, I expect the price of gas to moderate soon.
During my election campaign, in my closing or opening remarks, I used some research done by the Fraser Institute that illustrated just how big the Canadian government has become over the last 50 years. The research described how the price of basic necessities like food, shelter and clothing have increased over that time, but also showed that the tax burden surpassed all of them by a wide margin. In fact taxes are now the largest budget item of the typical Canadian family. So referring back to the media gas story, the tax story, the story where our choices are limited or non-existent, is ignored, not just by media but by most citizens.
The good people at the Fraser Institute updated that research in the latter days of the election and it was scooped up by the National Post too. The graph below is from this pdf, and the graph tells the whole story.


  1. I think I missed the day it dipped!

  2. Wholesale price of gasoline is down again today (so far). Price will be lower tomorrow......I hope. For Canadians (and you too Pete ;-) ) - check here:


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