Referencing the price of gasoline to the last time crude was trading at a certain dollar value a barrel, for example, is to a large degree meaningless as so many other factors including tax rate differentials, changes in the Canadian and U. What is the relationship between world crude prices and what I pay at the pumps for gasoline? How do PEI prices compare to other Canadian markets? The attached table offers a comparison of consumer prices across Canada. It should be noted that prices in regulated markets are much more stable than in unregulated markets where prices can vary daily and, in some cases, several times throughout the day.
It should also be noted that the volume of product sold in a particular market influences consumer prices. Which petroleum products are regulated in P. The Commission is responsible for regulating the prices of gasoline, diesel, stove oil, furnace oil and most propane products sold within the province of Prince Edward Island. A minimum and maximum price range is set for retail gasoline and diesel products whereas maximum prices are set for furnace oil, stove oil and propane.
Where does the Commission get its authority to regulate prices? Authority for price regulation is contained in the Petroleum Products Act. Under the legislation, the Commission’s role is to “ensure at all times a just and reasonable price for heating fuel and motor fuel to consumers and licensees within the province. How is the decision to change prices made, what steps are followed and what factors are considered? The Commission’s pricing decision process involves the daily monitoring of regional, national and international information relative to ongoing developments in petroleum product markets. Based on an analysis of this information, the Commission determines the price adjustment that normally occurs on the 1st and the 15th of each month.
The averaging process often results in retail prices that are either above or below prices in neighbouring provinces. This is the normal effect of price averaging and often results in PEI prices being several cents a litre either above or below those in effect in other jurisdictions at any given time. When prices are rapidly increasing in other provinces, PEI prices tend to be lower. What factors influence the world price of crude oil? Refined products such as gasoline, furnace oil, stove oil and diesel are made from the processing of crude oil.
Crude oil is sourced from all over the world, including the Middle East, Africa, the North Sea, Russia, South America as well as the United States and Canada. Crude oil and its refined product derivatives are bought and sold on various commodities exchanges around the world, such as NYMEX, with the price of these products changing every day and, indeed, several times a day. A variety of factors can influence world prices of crude oil and its refined derivatives. What is the difference between crude oil and refined oil products? Crude oil is the base product from which most refined oil products such as gasoline, diesel and home heating fuel are produced. Crude processed in Atlantic Canada is typically sourced from overseas locations such as Venezuela and Nigeria, shipped to Canada by ocean going crude tankers and refined into finished products in refineries located in Saint John, New Brunswick, and Come By Chance, Newfoundland. What factors influence refined product prices?
Refined product prices are impacted primarily by supply and demand issues. Traditionally, gasoline and diesel product prices are higher in the spring and summer months when demand related to domestic traffic patterns peak. Alternatively, home heating prices are higher in the fall and winter months when demand is highest. How does the value of the Canadian dollar versus the U. As crude is priced in terms of the U. Canadian dollar can make crude more expensive for Canadian refineries to purchase and, in turn, can make refined products such as gasoline, furnace oil and diesel more expensive to produce. A rising Canadian currency alternatively serves to reduce the cost of production which ultimately results in lower petroleum products prices.