The Vagaries of Gasoline Prices

When a barrel of Oil was trading at US$140, basic unleaded self-serve gasoline was going for about C$1.309/litre at my local Shell station. Yesterday morning, with Oil at US$113, it was selling for C$1.259.

A 19.3% drop in the price of Oil generates a 3.8% dip in the retail price of gas. As we always suspected, the prices are linked only on the way up.

And another thing: when you buy Premium gas at a station that features the single filling hose, assuming the prior customer pumped Regular gas, how much Regular are you getting before the Premium flows into the tank? Three litres? Certainly more than zero. If it were three litres, this would mean that most Premium buyers are spending $0.36 more per fillup than they’re getting in “value”.

Has this topic never crossed the mind of an enterprising class action lawsuit lawyer?

And another, another thing: why is Premium gas just 6.3% more expensive than Regular in New York State (for 92 or 93 octane), but 9.5% more expensive in Toronto (for 91 octane)? Canada has its own oil reserves and refineries, after all, so it can’t be the “smaller market argument” that we hear when U.S. Magazine and Book publishers try to justify the cover price differentials between a publication sold in Seattle versus Richmond, B.C.

Comments

[AlexS:]

Premium is relatively more expensive in Toronto because all those Canadians who've gotten rich off the commodities and currency markets can afford to pay more for premium gas for their high-priced sports cars.

2008 Aug 14 12:51 PM

[The Realist:]

I am going to have to disagree with you here. Oil doubled in the last year and gas in the US went from about $3 to $4, that does not seem like gas tracking oil. Actually the refiners are all near their lows because of this issue. So other than the fact of the premise of your article being entirely incorrect the rest of the article was great.

2008 Aug 14 02:34 PM

[jjason:]

Mark, You can do something that will help. Go To:

www.stopoilspeculation.../

AND SIGN THE PETITION. Also Go To:

www.star-telegram.com/...

and tell your friends.

2008 Aug 15 02:34 PM