Because it is a continuation of the problem, so some tax will come off. So what? The price of crude will continue to rise, and quickly make up the difference. It’s not “relief” it’s a vote grab.
By lowering Gas Taxes we are in effect saying.
“We do not like to pay high prices for gas, so we will make the prices lower.”
That is not addressing the underlying cause of these high gas (and crude oil) prices.
The cause of the high oil prices is a simple case of uncertainty about supply. Whether we are nervous because of Iran possibly cutting off it’s exports due to US military action… or because Nigeria is having civil unrest issues… or because Gulf Coast Hurricane damage is still limiting both crude oil and refined gas production. They *all* have one thing in common… they all affect supply.
If we weren’t having a supply/demand issue, then we wouldn’t be worried about one, or any of these things, and the market prices would not be reacting the way they are.
In that fashion… it’s quite simple.
So, back to my first statement. What we should be saying is:
“We do not like to pay high prices for gas, so we will *do* something to *cause* prices to lower themselves.”
Notice the subtle difference in the two statements?
If you do, and you combine the obvious facts that a) supply cannot be increased and b) demand is growing, then it becomes clear that lowering Gas taxes is exactly the opposite of what we need to be doing.
More below the fold…
OPEC countries have made it clear that they are pumping oil as fast as they can. And no, the Alberta Oil Sands are not our saviour they’re pumping as fast as they can too… and no, it’s not a refinery issue, at least not in North America, if it were, this proposed refinery would have oil to refine.
Clearly, supply from our biggest exporters has hit a wall… whether it’s “the” wall, we can continue to debate, or graph watch, but unless you’ve been totally ignoring the news, you have seen that the Stock Market seems to think something is up, no pun intended.
So.. if Supply is at the wall, then there is only one other variable to play with… Demand.
The term we should all become familiar with is:
Now that’s perhaps a stronger word than it needs to be, but I have no doubt it will be the one used by economists and the media to describe what either needs to happen to bring prices down… or what will inevitably happen if prices continue to rise.
Forgive me, for I am still hurting from my Vancouver Canucks missing the playoffs… so I will now invoke a hockey/sports analogy to explain our “destiny”.
I believe we are at a critical point. We’re down, but we’re not out. We still have an opportunity to limit our own demand patterns before market forces get out of hand.
Like my Canucks 20 games ago… we still control our destiny. It will be a tough road, there will be adversity, but if we are successful we will be much more likely to come out on top.
If we choose the “easy” route, if we choose not to make the extra effort, then we leave ourselves open to the possibility that we will lose. We may not lose, but then again, we may… my Canucks didn’t put in the effort. They lost. I don’t want to be like my Canucks.
We have all seen how rising gas prices have affected us. We are not happy about it. It makes our lives more difficult. It forces us to do things that we haven’t done in the past… like:
take public transport
buy more fuel efficient vehicles
turn down our oil or gas furnace
turn up our A/C
These are all things that are more difficult than our normal patterns and habits. But they are things we are willing to do, given the proper “push”.
If *everyone* were to do these things, then our demand for oil and gas products would naturally start to decrease. And the pressure on supply would naturally start to decline.
So, rather than decreasing taxes, which would simply encourage people to maintain their regular patterns… we should be *increasing taxes* on gas, gradually, but steadily… so that the shock is not severe enough to cause economic turmoil, but it is seen as “inevitable” enough to force us to change our habits.
That doesn’t mean there aren’t lots of places where we could cut taxes: freeze GST on all Hybrids for the next 5 years and reduce taxes on new cars with MPG rating higher than 25mpg. Reduce gas taxes for people in a “registered” carpool or ride-share. Lower bus and train fares (Greyhound and VIA Rail, as well as Commuter Transit).
Every public service that we must pay for is, in effect, a tax that our Federal, Provincial and Municipal governments levies on us. Certain services are meant to lower our oil/gas consumption… we must lower those services, that way, we are effectively lowering oil/gas taxes while at the same time addressing the supply/demand issue.
How our export-based industries have fared with the rising Canadian Dollar is an excellent example… despite the ongoing rise in our Dollar, our economy is still creating jobs and growing strongly, we are adapting. It’s not easy, it’s not without it’s hardships… but it’s happening, we’re surviving.
The EXACT same thing needs to happen on the Consumer side… we need to start changing our habits, we must adapt. If we don’t, then we will be at the mercy of the Markets, and George Bush’s or Abu Terrorist’s trigger finger. I know which option I would rather take.