I've been getting a fair number of comments on my post from January 23rd, where I attempted to respond to the perception that gasoline prices had not dropped enough in relation to dropping crude oil prices. Now, rather than wade in on each comment, I decided to watch the stream of comments to see where it would go. Even after a year and a half, I'm still trying to figure out when it's right for me to respond and when to just let people talk. Now I see some feel no one is paying attention, which wasn't my intent. So Anita, Sophia, Jim and the others (especially you Cliff), let me provide further detail.
Now one commenter, Orive even put my name in quotes ("Jon") which seems to question my very existence. In my defence, my bio and picture is posted on this site. And if I was going to make up a name, it would certainly be something cooler than Jon. Or at least have an "h" in it so I didn't have to correct the spelling every time someone writes it down.
But enough about me. I speak on behalf of an oil and gas company - Petro-Canada - so some of you may not wish to believe the things I say. Or believe I exist. Fair enough. So let me bring in a few other people to this discussion.
"As frustrating as it seems for consumers, gas prices have dropped with the price of crude oil," says Catherine Hay of MJ Ervin and Associates.
Crude oil prices have dropped from record highs of almost US$150 a barrel last summer to the US$35 a barrel range, leaving some consumers to question whether retail gasoline prices in Nova Scotia have come down proportionally. Ms. Hay said gas in Nova Scotia, which is now selling for 88.9 cents a litre, cost 82.9 cents a litre in April 2004, when crude last sold for about US$35 a barrel.
"It’s a little higher," she said, attributing the six-cent-a-litre difference to today’s higher refinery margins.
In the same article, Dale Madill, who watches the price at the pump closely for the Nova Scotia government adds that crude oil and wholesale gasoline are two distinct and seperate commodites.
"...there is no economic basis for the theory that gas should be priced at a penny for every dollar that a barrel of crude costs. "That relationship doesn’t exist," he said, except coincidentally."
In a Canada.com article from yesterday, Spencer Knipping, who does a similar job to Mr. Madill for the Ontario Government, elaborated on the impact of the higher wholesale gasoline prices.
"The wholesale price for gasoline has actually increased by quite a bit since late December, and that has put upward pressure on the pump price," Knipping said. "And that's happening despite lower or stable crude oil prices."
Over at the Federal level, Natural Resouces Canada continues to track all kinds of worthwhile data on fuel prices. There's plenty to read on the site, but I'd like to share their chart below.
Crude Oil and Regular Gasoline Price Comparison
While wholesale gasoline prices have been putting upward pressure on the price at the pump in recent weeks, you can still see that gas prices and the cost of crude have both risen and dropped this year. But, as those who follow the industry closely will tell you, it's not the only factor to consider.
This is all very similar to what I said back in January, but I hope it answers some of your questions or at least responds to some of your concerns.
Thanks and keep the comments coming.
Photo Credit: aftab (This one's for you Hazel)