Friday, October 24, 2008

Gas Prices Still Too High

Gas prices have been coming down but they haven't dropped to the levels most people would expect, given the current price of crude oil.

Over the past year or so, gas prices rose about 50%, while the cost of a barrel of oil rose about 50%. Now, oil has dropped 50% and gas prices have only dropped by about 20%. Also, it seems just a little interesting that the price stayed high (around $1.50 per litre) through the summer when people are more likely to be taking car trips and only drops now that everybody is back to their normal commute.

And how about the way the price fluctuates depending on what time it is? Wednesday morning I saw gas advertised at $1.159. Later it was $1.139 and then $1.109. Well after dark I saw it advertised at $1.099. This morning it was $1.170 during the morning rush hour. This isn't an unusual pattern, at least in the Lower Mainland. You can't tell me that gas stations are reacting to the changing price for crude oil on an almost hourly basis. If they were truly that sensitive to the market, the price of gas would be back down below $1.00 per litre, down around $0.75 or so.

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