As the price of fuel continues to increase, motorists cringe as they fill up their vehicles.
In some parts of British Columbia, prices have surpassed $2 a litre and elsewhere the cost is not much lower. Even in Alberta, where gasoline has consistently been cheaper than elsewhere in Canada, the cost of filling the tank is significantly more than it was a few weeks ago.
The sudden rise in fuel prices has prompted some Canadians to ask questions about why our fuel prices are so high, especially when Canada has plenty of crude oil.
The increasing demand for oil around the world is one factor in rising fuel prices. Another is the ongoing Russian invasion of Ukraine. Both of these factors affect the world crude oil price, which also plays a role in the price motorists will pay at the pumps.
Canada has not purchased oil from Russia since 2019. Still, Russia is a major player in oil production. According to statistics from the U.S. Energy Information Administration, Canada ranks fourth in proven oil reserves, behind Venezuela, Saudi Arabia and Iran. Canada has reserves of around 170 billion barrels of crude oil. Russia ranks eighth, with reserves estimated at 80 billion barrels of crude oil.
However, in terms of oil production, Russia is second worldwide, producing almost 9.9 million barrels a day. Canada, in fourth place, produces 4.2 million barrels of oil a day.
While Canada is a net exporter of oil, this country also imports some crude oil. This means the world oil market affects us not only as an oil exporter but also as an oil consumer.
Alberta has reduced its tax on gasoline to give motorists some relief, but this alone will not be enough to put a stop to rising prices. Taxes are just one part of the total price of gasoline.
Some have suggested oil pipeline construction as a way for Canada to become self-sufficient in oil. But this solution alone would not result in an immediate drop in prices at the pump. It takes time to construct a pipeline.
Oil production is complicated and it involves global markets. When it comes to the price at the pumps, there are no easy solutions.
– Black Press Media
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