Monday, April 22, 2024

Gas price increase NOT due to the carbon tax

I don't use gasoline personally, but people are outraged at the recent increase in gas prices at Canadian pumps. Prices increased by about 10c a litre overnight (more in some provinces, less in others).

Of course, many people are conveniently blaming the Liberal government and the latest increase in the carbon tax. But, in fact, that increase happened on April 1st, and amounted to a measly additional 3c on a litre, as the price on carbon was increased from $65 a tonne to $80. Moreover, the carbon tax rebate received by Canadians will increase proportionately.

The most recent price hike is solely down to the oil industry. In spring, oil companies switch to a "summer blend" of gasoline for the "summer driving season". Summer gas has a smaller proportion of butane and, given that butane is relatively inexpensive, that jacks up the cost, and therefore the price to the consumer. This change in the manufacturing process also costs money, and that too is passed on to the consumer. Go figure.

The quoted reason for this annual spring changeover is that gasoline evaporates faster in warmer temperatures, causing smog and "other environmental harms". Which wouldn't normally worry the oil industry unduly, but there are environmental laws in place requiring refineries to make this change. So, they can pollute more in winter and less in summer, it seems.

It kind of puts all the furore over the carbon tax increase into perspective, doesn't it? And you won't be getting a government rebate for this increase, either.

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