With retail gas prices rising again to almost $1/litre I did some quick digging to try and understand how that compares to crude pricing and margins in the past. What the #’s say is what we’re all feeling – compared to a year ago, current retail pricing is being inflated significantly beyond the price of crude.
Some simple numbers.
This year 2009, retail prices/litre were 2.87 x the price of crude/litre in January, 2.84 x in February, 2.24 x in March and 2.27 x in April.
For the same four months last year, retail prices to crude prices were 1.71 x, 1.75 x, 1.6 x and 1.56 x the price of crude.
So, in January 2009 retail to crude prices were 1.16 x more expensive than in January 2008, 1. 09 x more than in February 2008, .64 x more than in March 2008 and .71 x more than in April 2008.
That’s what you’re noticing at the pumps.
Interestingingly, taxes on gasoline have only varied a couple of cent’s/litre from 2008 to 2009 – which given the difference in retail prices, seems surprising but reflects the system of taxation.
In January through April this year 2009, the average taxes/litre in Toronto were 28.65 cents on an average retail price of 82.5 cents (34.7%).
In January through April 2008, the average taxes/litre were 29.82 cents on an average retail price of 106.75 (27.8%).
To increase margins, gas retailers have all the incentive in the world to increase prices – which seems logical. However, that doesn’t mean more $ to government, especially if demand drops.
Interesting business. Oil companies are doing really well.
Keep bending over.