Kevin Laliberte
Editor, Smoky River Express

If you think the price of petro at the pumps is high now, you better hang onto your wallets and purses because you haven’t seen nothing yet. That’s the ominous forecast making headlines right across the country this past week after CIBC’s top economist predicted gas prices will keep rising, hitting a jaw-dropping $2.25 per litre by 2012. Jeff Rubin, CIBC’s chief strategist and chief economist, says prices will hit $1.40 per litre in Canada, thanks to rising oil prices which are expected to hit $150 US by 2010 and $225 by 2012. Here in the Smoky River region the price of fuel has jumped by 10 cents per litre in the past two weeks, going from a seemingly bargain (insert heavy sarcasm here) of $1.14 to $1.24. Meanwhile, it’s been quite the first quarter for the world’s top oil companies. Record oil and gas prices and good operating performance get the credit for a 25-per-cent rise in earnings for Royal Dutch Shell, which is reporting a profit of nine billion dollars US. Oh, and how ‘bout Petro-Canada which has reported a first-quarter profit of 1.1 billion dollars, up from 590 million a year ago. Liberal Member of Parliament Dan McTeague, who regularly keeps an eye on the oil industry, says there is no justification for skyrocketing oil prices. He says it’s ludicrous that the same people who are predicting 200-dollar-a-barrel oil prices are also the ones profiting from the higher prices. McTeague warns Canada’s economy is at a breaking point, with most Canadians now struggling to pay for necessities, including gasoline and food, while oil company profits soar. Others suggest that price of gasoline has risen artificially in recent years because controlling oil companies have found they can increase prices without any repercussions. Call it capitalism in it’s purest form? They have taken advantage of world events and have tightly controlled the refining processes to maximize profit margins. Ah,yes. The easy thing to do is point our collective finger (you know which one) at the oil companies in spite of the fact that almost 40 per cent of the pump price of fuel is taxes. The reality is that here in Canada we pipe the majority of our crude oil south to US-based markets. Some people suggest the oil price forecast is writing on the wall for everyone to see. Find another source of energy, preferably inexpensive, clean and renewable (like wind and sunlight)...make it easily useable, or face some dramatic consequences in the near future. But don’t hold your breath waiting for alternative sources to be developed. Do you honestly think big oil companies and the government are going to allow clean and environmentally green long-term energy sources to be developed when their bread is essentially buttered by lofty oil and gas revenues? I think not! Still, look at the bright side. In spite of the increased pump prices, Alberta, believe it or not, continues to have among the lowest prices for gasoline in Canada. Fuel tax in Alberta is only nine cents a litre, the lowest of the provinces, and it has not increased in more than 14 years. The next lowest fuel tax is 11.5 cents a litre in Manitoba. In addition to the nine cent a litre provincial tax, the federal government also collects a fuel tax of 10 cents a litre. These are flat taxes that do not change with rising gas prices. Oh, and don’t forget about the GST, which is also applied to the total cost of gas, including the 19 cents a litre in federal and provincial fuel taxes. Here in Alberta, our government reminds us that province benefits from high oil prices in other ways. For every $1 increase in the price of crude oil over a year, provincial revenues increase by nearly $100 million, which allows Alberta to invest more in health care, education, and infrastructure. Maybe we should all drill an oil well in our backyard like good ol’ Jed Clampett did in The Beverly Hillbillies sitcom. Hey, you never know what one might find. Or better yet, maybe we should all say to hell with it, attach a sail to the roof of the old car or SUV (Suddenly Useless Vehicle) and throw it in neutral. Now there’s an environmentally-friendly investment solution worth pursuing!

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