Fuel Cost and the Expectation from our Government

The cost of fuel has been on an unprecedented rise; today is May 2nd 2022 and gas is posted at $1.87 and up and diesel is at $2.45 and up. Interestingly, Canada is an Oil and Gas rich country. By comparison, the price of a liter of diesel in Aruba is less than what it is in Toronto and that by a 30% margin!!

While the gas price impact is on every driver of a car (and there are ways to harness the impact by car- pooling or using public transit where available), the diesel price has a much wider and deeper implication in that, it adds to the cost of production as well as transportation of everything, food, merchandise and interestingly, fuel delivery and as such, impacts every household and every resident in multiples.
A comparison between different territories in North America (Google search) shows that the price varies in different places (large or small cities, provinces and states) and that the rate of price increase has not been the same everywhere! This, points amongst other things to suppliers pricing strategies, local and federal government policies, surveillance and (lack of) control.

In USA, these changes could be found by visiting: https://www.eia.gov/petroleum/gasdiesel/ You may also find the diesel price in different countries around the world at:
https://www.globalpetrolprices.com/diesel_prices/
In general, free economies base the price of every commodity or service in relation to the supply and demand. For gas and diesel, we have had no significant shortage in supply and no massive increase in demand. Interestingly, the supply of these critical commodities is almost in the monopoly of the oil companies that as a result of mergers and acquisitions in the recent decades, have managed to outsmart the governments and create a united front to milk the public when they like and to the extent they like.

This recent increase in fuel prices has not followed any logic except that if all happens according to the “plan”, the world will have a much lower demand for these fuel types past 2030 thanks to Hydrogen or electric trucks and cars. So, in the next one or two decades, the monopoly will continue to test the public with new (higher) price points and this will continue as long as they can trying to maximize what they can collect from their soon retiring assets that produce gas and diesel.

On the side of the public, no one is protected! Higher fuel costs significantly impact the life of every person in Canada or other countries experiencing a similar raid. At the groceries or large merchandise centers such as Costco or WalMart or others, new prices are shocking every purchaser. From food to dairy or other household consumables, the price of every item or service has significantly gone up and that, at much higher than the publicized inflation index (how did the government calculated that at 6.8 %?!!). It is easy to see how the increase in diesel price from $1.15 per liter in the end of 2021 to $2.45 per liter in May 2022 has changed the prices.

The public is defenseless and this is no less than an invasion attempt by an enemy, homegrown or foreign, into Canadian households and life. Our Government should step in; in fact they have had to be prepared for occasions like this and have contingencies to ensure that people’s life and livelihood is not so compromised.

Unfortunately, a look at the Ontario government published information (https://www.ontario.ca/page/motor-fuel-prices#section-3 shows that this has not happened yet! Notice the tax component of the diesel and gasoline cost at the pump and you will see that the government (Federal and Provincial) have enjoyed much higher tax revenue from the increased fuel prices!

Governments should not make money like this! If the tax component on diesel is a percentage of the price and at the time of writing the budget, that revenue per liter was based on a price of $1 per liter, the government should not use the increased revenue (because the price of diesel increased to $2) for anything but to provide relief to the transportation industry to keep that component of the price increase down and help the public to suffer a not so massive price shock on everything.

The Ontario election is around the corner. We wish the Federal elections could happen much sooner as well (how difficult is it for our politicians to acknowledge that their incompetence is the root of them not getting a majority government and that a majority is not achieved by summing up two minorities).
We ask our fellow countrymen and women to ask each and every one of our MPs and MPPs for a stance and a clear program on how they will commit to helping Canadians before thinking about helping others?

When our Food Bank is reporting a several fold increase in people needing their help for feeding themselves and their children, who is the prime minister or premiere or MP/ MPP who wants to sign assistance cheques to other countries before making sure that Canadians are looked after for the minimum?

We expect effective action and that on an urgent basis. We are worried about future and the inaction and passivity demonstrated by our Federal and Provincial Governments on things that matter. Appearing on the world stage and promising help and reassurance to those in need is only meaningful when people at home are not hungry and worried about tomorrow.