Former Lancastrian

Anybody make sense of this taken from a CBC article

Prices reached 140.1 cents a litre in Toronto and 147.9 in Montreal. That's about eight per cent higher than a year ago, even though crude oil prices are lower.

Crude for May delivery fell $2.71 to $101.30 US a barrel midday Wednesday on the New York Mercantile Exchange. A year ago, crude was trading at $104a barrel.

David Detomasi, an assistant professor of international business at Queen's University in Kingston, Ont., called the latest increases "pretty shocking." For the most part, he said, there's no reasonable explanation

fletcher m

And today, the lesson in microeconomics is:

It is all about the elacticity of supply and demand.

Oil is inelastic, discuss...

Former Lancastrian

There again this report is blaming us drivers for higher prices
http://www.winnipegsun.com/2012/04/0...es-say-experts

Novocastrian

I pointed out earlier that at the present, supply and demand is being sidelined by speculation in the futures market.

Also, oil is not inelastic in the long term.

Oink

In the long term there won't be any left.

Novocastrian

A related issue. Hence the long term elasticity.

bigals

even if there was I cant afford it

JB0591

Shouldn't we take into consideration no annual MOT cost here when we compare UK/CAD prices of running a motor vehicle?

Novocastrian

No. Trivial money.

bigals

No the repair costs are crazy here,and oil change intervals are stupidly short here,
the actual mot test is not that great

fletcher m

A bit of a simplistic answer, I would have expected you to have expanded with some detail..though you are correct. Supply is controlled in the main by OPEC producing countries and it can only become elastic if output is increased without increasing significant additional costs. Short term it is elastic, though there are some factors that effect this, Capacity to transport crude or the ability to refine the producs you need. There are no real substitutes for gas(petrol) not in the short term anyway

The demand for oil and in particular gas(petrol) is inelastic, most necessities are inelastic, when people need gas(petrol) to go to work, they will fill their tank irrespective of whether the price has gone up or not, they fill it and moan..you only sell more gas if there is spanner thrown inthe works, example, our Govt of late saying fill your gerry cans and keep your tanks filled up, once they are full, the queues go down and demand drops, in the mean time, Dodgy rogers petrol station hikes the price up 2p! People will only use what they need.

So, is the price going up a result of outside circumstances, perhaps, it is also dodgy Roger making a few quid. Same time next week?

magnumpi

It's not dodgy Rogers, he is busy ripping off TV and phone customers.

fletcher m

YYZlover

My 19 y/o volvo does roughly 8 litres per 100km. The Hyundai Elantra rental I had in Canada did the same.

Then why do you have an F150?

Insurance can run up to $500 a month as well, depending on what car you have, even if you have a no claims record. A new top of the range Audi A4 or A6 (for example) would be in that range. Even Japanese cars or US cars. Drive more than 15000 km a year and insurance goes up considerably. My old volvo is $700 a year and I have a no claims record. My road tax is $250 a year. A diesel car would be taxed at around $1000-$1500 a year.

Basically, my fuel bill would be cut in half, moving to Canada, while my insurance would probably double or more. I still think I'd save money in the long run.

scrubbedexpat133

Ask for fully synthetic oil if not they will give you mineral hence oil change needed after 6000km instead of 18000km.

I found Labour rates here about the same if not a bit less than UK