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Ontario winter-grade gasoline price decline

Ontario Progressive Conservative MPP (Member of Provincial Parliament), Prabmeet Sarkaria, has posted photos online (Twitter, November 29, 2018) that members of his constituents have sent him of retail gasoline station price signs. The reason for the photos is the assumption that the cancellation of the planned provincial ’carbon tax’ by the newly elected Ontario PC government has brought down, or maintained, the price of retail gasoline at the pumps. As an MPP, Prabmeet Sarkaria has, predictively, joined in that assumption. The truth is different.

I fully agree with the scrapping of the planned Ontario ‘carbon tax'; however, applauding and praising the government for the current lower gasoline prices is absurd. Retail gasoline prices can rise and fall for a variety of reasons (taxes, price of crude oil, refining and marketing costs, cost of wholesale gasoline) and one of the reasons for a decline in retail gasoline prices at the pumps can be the switch by refiners from producing summer-grade gasoline to producing winter-grade gasoline.

Summer-grade gasoline is a government mandated gasoline blend intended to control warm weather ground-level ozone that can be harmful. Summer-grade gasoline costs refiners several cents per litre more to produce compared with winter-grade gasoline, and this is why gasoline prices can decline in winter and can rise in summer as refiners switch from one grade to the other.

It is true the 'carbon tax', had it been put into effect, would have increased the price of retail gasoline; however, any politician who is trying to take credit for a decline in gasoline prices at the pumps because of the elimination of the planned ‘carbon tax’ is trying to take credit where credit is not due.

If the Ontario PC government was serious about reducing the price of retail gasoline then it would abolish the current 15 cent per litre provincal gasoline tax that has been in place since 1925. 

(c) Trevor Dailey

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