Who’s really behind the burn at the fuel pump?

You can see the resignation on people’s faces when you pull into any fuel station. Even though the prices at our local gas stations have remained consistently lower since last Summer, by a few cents, than our neighbours in North Bay or Sudbury, it’s a small consolation. Speculators predict that fuel prices will rise above $1.50 per litre by the Summer. That will surely put a damper on family road trips and boating excursions.

Personally, I don’t cruise around much. I use my vehicle mostly just to commute to and from work. When I first started at my current  job back in 2000, it was costing me about $30 per week for my commute. Today, it costs me about $120 per week. Commuting with others has been suggested but, in reality, it isn’t all that feasible simply because on a day to day basis our schedules don’t necessarily mesh.

When I think about how fuel prices affect pretty much everyone and everything, I wonder why the Government doesn’t take strides to regulate them. Long haul truckers, public transportation, farmers, construction crews, public works, policing, heating, fisheries, the list goes on and on. The rise in shipping and transportation impacts the cost of goods and services everywhere. Rise in production costs as well. Which is partly why a loaf of bread that used to cost $.99 now costs us over $3.00.

Many blame the rise in cost for goods and services on manpower – that salaries make up nearly 50% of the cost of production and delivery – and that salaries are simply way out of line. This is what the Federal budget seems to suggest by imposing wage freezes to public sector employees over the next few years. But when you consider that the price of fuel and staple goods has more than doubled over the last 10 years, how can we expect people living on minimum wage or fixed pensions to keep pace with a cost of living that is spiralling out of control.

I’m all for doing my part in order to help Government balance its books. But I also believe in looking at the big picture and making sure that while you target public sector employees and pensioners to stem the hemorrhaging of public funds, they should also take a hard look into mechanisms to control inflation and the cost of living for everyone.

Fuel prices would be a great place to start because, as I’ve mentioned, it impacts pretty much every aspect of our current cost of living. We all know that fuel is a finite resource and I’m sure we’re all sensitive to the environmental impact of extracting, refining and consuming fuel. As a commodity, fuel markets fluctuate, driven by a simple demand versus supply formula, which invariably affects prices at the pumps. We also know that Canadians consume more fuel than we produce and that European countries pay more tax at the pumps than we do. We know all of this.

What we don’t know is why something isn’t being done to address all of these issues. For instance, in Venezuela, the petrol industry is a Crown corporation. The Government has a hand in all stages of the fuel extraction and refining process. Why are we exporting our oil for refining rather than investing in Canadian refineries? Why are we not looking at options to produce fuel in pace with our own consumption needs?

Furthermore, if you want to talk about economic stimulus, why is the Government not making research and development in alternative fuels and alternative transportation a number one priority? I’d rather see my tax dollars go towards that portfolio than a fleet of F-35 jets. Instead, they claw back Solar Energy incentives and, and in Ontario, they divest the ONTC. In addition, prices at the gas pump which consists of a $.10/liter Federal Levy, a $.147/liter rose by 5% (from 8% to 13%) when they phased in HST. A levy is just another word for tax and charging HST (tax on tax) is just wrong. Roughly $.43 of every liter is tax. Price fixing is the topic of the day with the recent finding that Canadian Tire and Pioneer were caught red-handed fixing fuel prices in the Toronto Metro Area and Kingston: www.thestar.com/business/article/1149570–canadian-tire-pleads-guilty-to-gas-price-fixing

Leaving fuel markets up to the ever changing winds of strife in the Middle East and American interests seems irresponsible. OPEC, the international governing body that oversees the market for Oil producing countries was formed back in the 1970′s to try and regulate oil prices at $70+ per barrel in an effort to make the cost of fuel expensive enough to encourage oil companies to spend money in exploration and drilling: en.wikipedia.org/wiki/OPEC

In 1971, the US Dollar was set against the Gold standard but when they realized they were so deeply in debt that they didn’t have enough gold reserves to cover their loans, they hitched their currency to the Oil Standard and have been actively involved, in one way or another, in protecting the value of the US Dollar ever since. Military and political involvement in the Middle East; political squabbles with Hugo Chavez in Latin America – you don’t have to be a political analyst to see what’s really going on. Or do you?

You can’t believe the American propaganda machine when they are trying to sell you on the noble motives (weapons of mass destruction, terrorism) for their military actions in oil producing countries. It’s anything but noble. In fact, it’s called Petrodollar Warfare and it’s all in the interest of ensuring the strength of US currency. It seems any time an oil producing country suggests they are open to moving away from the USD Oil Standard and accepting alternative currencies such as Gold, the US conveniently finds a reason to invade that country and oust its leader. If you want an interesting read on this issue, I suggest the book “Petrodollar Warfare” by William Clark:

The current spike in fuel prices is being blamed on nuclear programs in Iran. A few months ago it was Libya. Before that Iraq. Give me a break. I don’t have answers or solutions. I wish I did. But I think it’s a mistake to be complacent about these issues. Resignation is not a viable option.  I just want to be part of the discussion, one that we should ALL be having.