I recently posted about problems with the Alberta oil sands and the impact on carbon emissions and the environment [The Problem with the Alberta Oil Sands].
I noted that Alberta had received lots of money from the oil companies and suggested that the provincial government was well-positioned to take the lead in developing cleaner methods of extracting oil. I specifically said that the province had "plenty of room to manoeuvre."
One commenter noted that the provincial government doesn't have as much money as we think. But that wasn't the entire point. I was also referring to the fact that provincial income taxes are lower in Alberta and the province does not have a sales tax.
I was thinking about gasoline prices as well. Here's a map of current gas prices across Canada from GasBuddy.com. Most of the differences are due to taxes. Notice anything peculiar about Alberta—the province that's being accused of so much pollution? I think there's room to manoeuvre if it's serious about climate change.
Here's the USA map for comparison.
A typical US price is $2 per (US) gallon. The current Canadian dollar is equivalent to about 0.8 US dollars and there are 3.79 litres per US gallon. This means that a typical US gas price of $2.00/gal is equivalent to 53¢(US)/liter or 66¢(CDN)/liter.
A typical price for Canadian gas is about 86¢(CDN)/liter so the USA is selling gasoline for 20% less than Canada. I think this is mostly due to lower taxes.
I don't know what the current price of gasoline is in Europe but I suspect it's much more.
"I think this is mostly due to lower taxes. "
ReplyDeleteCould be, but you haven't quantified any of the tax rates to make that assumption, so it seems rather speculative in spite of the maps that show price differentials by political boundaries.
There are other factors besides taxes that can affect the price of gas by political boundaries, including state regulations on gasoline, as is the case in California.
I don't know what the current price of gasoline is in Europe but I suspect it's much more.
ReplyDeleteYep. In $/gallon last week. Belgium, France, Germany, Italy, Netherlands, UK, USA: 5.58, 5.47, 5.54, 5.50, 6.03, 4.95, 2.15
When staying in the UK several years ago I read an article on gas prices in a local English paper, and did a little math... it turned out that the non-tax price of a gallon (or liter, or whatever unit you prefer) was the same in both countries; the entire difference was tax. This is sensible if you believe that markets are effective price-setters (regardless of whether you think that's good or bad).
ReplyDeleteI've always supported higher gas taxes in the US. I find it incredible that there are politicians who want to enact a mileage tax (that's difficult to measure and collect and doesn't deal with mileage differences) but won't touch the gas tax with a 10 foot pole. (Thanks to the trucking industry, who would effectively pay a lower rate vs. other drivers if mere mileage was taxed.)
If we are going to improve the tar sands it won't come through taxing the pump, it'll have to deal with the drillers and refiners directly. I don't see how a sales tax or gas tax are supposed to change anything.
ReplyDeleteStockholm, Sweden in at about $1.48(CDN)/L or $5.58(CDN)/gal. Yes, it is all taxes. The price has barely moved during the whole oil price roller-coaster ride.
ReplyDeleteTo Tyro - it will have an effect by reducing demand for the oil, by reducing gasoline purchases at the consumer level. If oil is abundant and prices low, the tarsands are (without subsidy) not a profitable source.
it will have an effect by reducing demand for the oil, by reducing gasoline purchases at the consumer level. If oil is abundant and prices low, the tarsands are (without subsidy) not a profitable source.
ReplyDeleteReducing demand to the point that the drillers leave the tar sands isn't taking "the lead in developing cleaner methods of extracting oil", and it certainly isn't manoeuvring. I might strain my imagination and picture the Alberta government encouraging cleaner extraction but I can't see them doing anything to stop it.
And lets face it, crude oil prices are lower than they've been in many years, 20% of what they were in July of 2008. If that hasn't led to cleaner extraction methods, a tax at the pump in one province (when most of the oil goes to export) isn't going to do squat.
Aussie numbers:
ReplyDeleteA$1.13/litre (A$4.28/gal)
C$0.92/litre (C$3.49/gal
US$0.72/litre (US$2.73/gal)
But that's because our $ sucks
(And its litre, litRE! But what do you expect from a continent that can't spell palaeontology!)
Here in Portugal 1 liter of gas is about $1.6 CND (1 euro). 64% of that is taxes.
ReplyDelete