Neil Reynolds from the Globe and Mail's report on business says people who want government to do something about the price of gas should be demanding lower gas taxes. After explaining why the profit margins of oil companies are actually slightly lower than most S&P Industrials.
Whatever. Most people still think the government should do something.
Precisely. Here at home, the federal government alone collects an extra $100-million in windfall revenue from every 10-cent increase in gas prices. As the Canadian Taxpayers Federation observed earlier this week, in observance of its Gas Tax Honesty Day, one of the biggest costs in filling our tanks is the cost of government. Taxes account for 28 per cent of pump prices. Strip out the taxes (32.6 cents a litre) and you get back to the real price of gas: 86 cents a litre. All by itself, this honest-to-God price proves that there's no scarcity of oil. Which is obvious when you think about it. When – anywhere in the world – have we ever run out of gas?