Vive Le Canada

N.B. Gas Stations Protest Fixed Prices

Posted on Wednesday, July 12 at 13:58 by RPW
http://www.cbc.ca/canada/new-brunswick/story/2006/07/11/nb-gasprotest.html Commentary: The federal government, the provincial governments, and the oil companies all make Very Large Profits (VLP) from the extraction, refining, and distribution of petroleum products. In fact, the profits are so very large that the GDP is skewed considerably, with indications all reading that "times are good" in this nation of ours. Why then, do there exist what can only be called "fall guys" in this so-called "best of times"? And especially in the oil & gas business? With the likes of Alberta reaping VLPs, and being matched by the feds' take from the O&G "business" (is it REALLY a business when profits are a slam-dunk?), why are there businesses in this particular hydro-carbon chain that are losing money?

Note: http://www.cbc.ca/canad...

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  1. by avatar Dr Caleb
    Wed Jul 12, 2006 9:41 pm
    "why are there businesses in this particular hydro-carbon chain that are losing money?"

    If you want to run an 'independent' gas station, you still have to buy your gas from someone. Refineries set the price they will sell it to indies, and the indies agree it won't be sold at a given lower cost (ie: they won't undercut the refinery owned gas stations prices).

    So, when the Gubmint fixes prices, it's usually at a lower price than the indies buy it for (or slower than the price change), and the indies lose money. But the chains have the benefit of owning the refineries, so they can revise the price they bought it for, so they can still make money despite the price controls.

    Yet another reason to a) not regulate the price or b) not have the refineries owned by the producers/drillers and retail outlet. Total supply chain economics works good for fast food outlets, but sucks for a required commodity such as petrol.

    ---
    "I think it's important to always carry enough technology to restart civilization, should it be necessary." Mark Tilden

  2. by boflaade
    Thu Jul 13, 2006 6:01 am
    The wrong party is being forced to regulate the obnoxious fuel prices. As usual it's the man at the bottom who bears the weight. Profits of oil companies will never go down. The man selling their fuel is the one who gets the full brunt of an irate consumer. He is the one to loose profit if the price is fixed. The oil companies could care less.

    ---
    Expect little from life and get more from it.

  3. by RPW
    Sat Jul 15, 2006 2:55 am
    <blockquote>Total supply chain economics works good for fast food outlets, but sucks for a required commodity such as petrol.</blockquote> You mean, fast food isn't a necessity..........? <p>---<br>"It's not the people who vote that count; it's the people who count the votes." <br />
    - Joseph Stalin

  4. by RPW
    Sat Jul 15, 2006 2:57 am
    <blockquote>Profits of oil companies will never go down.</blockquote> And our government(s), purportedly "of, for, and by the people" will ensure that one of their big contributors (to both parties) will always be there, and in full bloom......<p>---<br>"It's not the people who vote that count; it's the people who count the votes." <br />
    - Joseph Stalin



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