Oil prices have nothing to do with gasoline prices and vice-versa

Jul 20, 2012 3 Replies

This pertains specifically to Ontario, Canada, but is reflected elsewhere. We should be paying about $0.90/L for gasoline, but we aren't. The oil companies talk about crude oil pricing, but more and more, it has little to do with the price of gasoline.



In 2008, oil hit $140/barrel and gasoline hit $1.42/L. Since there are 170L's of oil per drum of oil, this worked out to a price ratio of



1.71:1 gasoline versus oil. Now, oil is only (at this time) $90.00/barrel, (it actually fell to $83 a couple weeks back) but gasoline is $1.28/L. This is a gasoline to oil price ratio of 2.41:1. This represents a price increase on gasoline of almost 42% compared to 2008. Even factoring out the $0.08/ L tax the Ontario liberals levied on gas with the HST, gasoline and oil prices are still vastly more divergent than years ago with increases that greately exceed inflation.

prices you see on TV are for oil futures, or price of oil in the future 3 months, not now.

Gasoline is a mixture of oil products that changes over the year to insure the gas ignites with cold air and hot air, and doesn't vaporize in the fuel lines (vapor lock). So Summer gas is more expensive than winter gas.

Oil is a raw product, and gasoline is a refined product, and the cost of processing gasoline insulates its price from the cost of oil .

also, the formulation of Gasoline (and additives) has been changed by politicians, from Lead to MERK to Ethanol.

Oil is priced at sea per tanker, as delivered to Oklahoma.

the USA is slowly cutting off Canada from all oil products and gasoline. The USA sees Canada as a habitat for leftist pot smoking liberals that like to stay in the dark. ( AP press)

Ridiculous. Gas prices have been stable (in Canada) for the last 12 months.

The refiners are getting the same now as five years ago.

10-12% ethanol is not boosting the price-spread that much. Meanwhile, the refiners are so starved for cash they're closing up shop. That can't help.

Very True - most people dont know that.

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( the world is far more complex than your simple generalizations. )

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