However, a closer look at what is driving price increases shows that it is gouging by the industry — not taxes — that is to blame. Factors controlled by industry (non-tax market factors) include the cost of crude oil, the margin taken (or mark-up) by refineries, and the margin taken by gas retailers. (The latter two items — the margins taken by refineries and retailers — are not the same as profits, since there are additional costs in those businesses.)
Gas Gouging: Blame Big Oil, Not Taxes
A look at the numbers show why Greater Vancouver gas prices are so high.
Comment from FB:
"... The cost of crude oil is the biggest factor, up 32.3 cents per litre. This is a reflection not of production costs, but of the going world oil price. This price increase is thus pure profit for oil producers."
If the author is pointing at "world price" being the driver of increased price, that would reflect on both the cost and the revenue for the producer. While that would increase their profit, it is far from the definition of "pure" profit.
"... Parkland recently issued a press release citing a record fourth quarter of 2017 profit of $469 million (its first quarter owning the Burnaby refinery)."
Parkland purchased the refinery at a fire sale price, the facility nearing the end of its useful service life. Chevron had already amortized the development costs, which would have been reflected, along with the limitation of the plant's remaining service life, in the sale price. As is typical with refineries, their net incomes rise dramatically during this period.
If the author is pointing at "world price" being the driver of increased price, that would reflect on both the cost and the revenue for the producer. While that would increase their profit, it is far from the definition of "pure" profit.
"... Parkland recently issued a press release citing a record fourth quarter of 2017 profit of $469 million (its first quarter owning the Burnaby refinery)."
Parkland purchased the refinery at a fire sale price, the facility nearing the end of its useful service life. Chevron had already amortized the development costs, which would have been reflected, along with the limitation of the plant's remaining service life, in the sale price. As is typical with refineries, their net incomes rise dramatically during this period.
No comments:
Post a Comment