Fuel prices, exports, imports and taxes
Re: “Consumers are gouged at the gas pump”, (Citizen, April 25)
The only part of his letter I can agree with is “High fuel prices affect not just people who drive, but all the things we buy that have to be transported will increase in price.” Please tell Mr. Horgan this, as I feel economics is not his strong suit.
The “Parkland” refinery at Burnaby is small and has a capacity to process 57,000 barrels crude oil a day (8,949,000 L/day). Of this only 35 per cent is gasoline or 3,132,150L/day. Demand for gasoline (2016 Statscan) is 12,597,063 L/day. Therefore, there is a shortfall of 9,464,913 L/day. As much as 60 per cent of the shortfall is made up from Edmonton via the Trans Mountain Pipeline (source Bloomberg Markets April 2018). Fortunately, right beside us is Washington State with five refineries with a combined capacity of 630,000 barrels/day. It is they who supply the balance of our needs in lower mainland B.C. This includes jet fuel because “Parkland” can only supply 40 per cent of the airport needs. It is necessary to factor in jet fuel for Victoria, Nanaimo and Comox airports.
Canada exports 145,000 barrels of crude oil per day to Washington State via the Trans Mountain Pipeline, and Canada imports refined products.
Mr. Beaumont’s observation about government taxes is quite realistic. The federal government levies 10 cents/L excise tax (this was meant to be a temporary tax back in the time of Trudeau senior), they also extract five per cent GST after other taxes and levies are factored in to the selling price. B.C. charges sales tax at 6.67 cents/L plus the carbon tax at 7.78 cents/L (Total taxes amount to 24.44 cents/L or about 17.5 per cent of the total cost before GST).
How much are you willing to pay for a litre bottle of water?
Christopher Carruthers
Duncan