Tuesday, December 9, 2008

"Fulled again: U.S. gas prices 30% below those in Canada” from the Current Business Feed

I have read the article “Fuelled again: U.S. gas prices 30% below those in Canada” it was interesting to read the arugments why US gas prices are less than the gas prices in Canada. The factors stated in the article stating why the price of gas is higher in Canada is as stated, the wholesale of gas in the states is cheaper. In the article it states that the tax on gas in Canada compared to the US is couple times higher, the exchange rate was another factor. Another factor is the US population is about 10 times higher than the population of Canada. Also, Canada does not make enough gasoline sales to lower the prices of gasoline. Understanding the gas price in US and in Canada are significantly different due to population, I think. US has 10 more population that Canada, that is what I think the biggest difference between countries. If Canada had the same amount of people as the United States, then Canada could afford to lower its taxes and could compete with United States with their gas prices. The market demand is perhaps not as high in Canada as it is in United states, due to the population difference. United States is our neibouring Country, I do not understand why there hasn't been an agreement on gas prices between the Countries. Perhaps with the new president, the gas price issue will be brought up. I think that being so close, and Canada makes gas and sells it out of country, you would think that the gas price would be lower than the US. Its something to think about.

1 comment:

tnb said...

Interesting thoughts.