Gas increase

Local resident challenges the formula behind the changing price of fuel

I have a question.

Why is it that when the price of oil goes down by 2.72 per cent (one exchange said the drop was only 2.65 per cent), we get an increase at the pumps of 13 cents a litre?

At 200 litres a barrel, that’s $26. Sure you don’t get 200 litres of gas out of a barrel of oil. You get just under half of that barrel as gas. You also get diesel, oil, grease, solvents and literally hundreds of other products that come from a barrel of oil. Maybe one of the most important being toilet seats. Somehow, when you’re talking about the price of gas a toilet seat just seems to fit the topic.

The point being that for every 200 litres of gas the oil companies sell today they are raking in $26 more than they did yesterday, and, for the most part, that is the same gas they had in there yesterday.

So how is it when the price of oil is dropping that the suppliers can argue that the supply is down? Wouldn’t a lower supply equate to a higher price per barrel? Their math is more mysterious than the monster that lives in Okanagan Lake or those little particles that they keep searching for in the CERN atom smasher over in Europe.

It seems to me that the law of supply and demand isn’t factoring into the price of gas. It’s more likely the law of greed is coming into play.

Glen Johnstone