Joined: Oct 2010
Posts: 960
Canada Needs Another Refinery, But It Ain't Gonna Happen...
8/18/2015 at 5:19 PM
If a major refinery shuts down for maintenance or whatever, then it stands to reason that there will be less gasoline available. The Law of Supply and Demand applies. When there is less of something available that normally is in demand, the price goes up. If we had more refineries, especially in Canada, the price likely wouldn't have increased by as much as it did.
I wouldn't count on any new refineries being built any time soon though. Unless, of course, you want the government to build them using taxpayer's money. The oil companies sure aren't going to build them, not now. Not with the world price of a barrel of oil in the $40-$50 range and the prospect of Iranian oil hitting the world market, further driving down the price per barrel. Then, there's all of the whining and screaming that they would have to put up with from the NIMBY crowd. As soon as they disclosed where they were going to build the refinery, every environmental activist group in the country and some who aren't, would show up and be chaining themselves to trees and anything else they could find. The greenies would immediately announce that there was some rare species of twelve legged spotted ant that had to be protected and declare the whole area as "environmentally sensitive", one of their regular tactics. Meanwhile, it would take years, even decades, before the oil company would be allowed to build their refinery, if they would ever be allowed to build at all.
But why would they even want to build? It would cost an exorbitant amount to build it and would result in them selling gasoline at a lower price. If you were in business would you spend a whole lot of money to do something if it meant that you would have to sell your products and services for less than what you're selling them for now?
There are some gas bars that always raise their prices first and drop them last. Those are the ones that I avoid like the plague. If you've noticed which ones do that, you may want to avoid them too. I also like to buy from the ones that have useful rewards programs. Anyway, if you compare the price of a litre of gas to the hourly minimum wage, the price of gas really hasn't gone up that much over the years. It remains to be seen if it will drop and by how much, after the peak driving season is over and that US refinery is up and running again.
Edited by Triplethreat, 2015-08-18 17:24:21