BC Carbon Tax Pushes Gas Prices Up to Record
02 July 2008
Times Colonist. With British Columbia, Canada’s new carbon tax now in effect, gasoline prices in the province have climbed to a record high. The tax imposes a C$0.024/liter (US$0.09/gallon) carbon levy on fuel; prices for regular gasoline in the Greater Victoria area settled yesterday at C$1.494/liter (US$5.476/gallon).
Vancouver prices surged higher, to $1.520 [US$5.66/gallon US] at many stations, up a full dime from the day before. The average rate nationally for regular fuel, according to a weekly report from petroleum industry research group MJ Ervin & Associates, was $1.395 a litre [US$5.197/gallon US], up 1.1 cents from a week earlier.
BC’s carbon tax is meant to encourage people to switch to a more energy-efficient and environmentally sensitive way of life; it is set to increase to 7.24 cents per litre [US$0.27/gallon US] by 2012.
The timing of the tax is unfortunate in that the rise in oil prices has already had an effect. I see way more scooters on the roads than ever before. I would have preferred to see a rising floor price for gas implemented instead. However, another 2 cents/liter hardly justifies the bellyaching around here given the fact that the tax is revenue neutral (probably even negative). I've already cashed my cheque. Our local NDP (left of center) opposition is going to lose any green support they ever had with their FUD campaign against the tax. If they have an alternative, they certainly aren't doing a good job of communicating it.
Posted by: Neil | 02 July 2008 at 09:24 AM
It'll be interesting to see what prices do over the next few weeks. I suspect that at the higher prices they might not be able to sell at the rate they've been producing, and that the retailers and refiners are going to end up having to absorb some of the tax.
Posted by: Frank Schmitt | 02 July 2008 at 10:06 AM
taxes, taxes, taxes.
Who really likes taxes? People love their services but belly-ache when it comes time to pay the piper. In this case it's supposed to be revenue neutral and like Neil said, it had the unfortunate timing to be in the middle of record high gas prices irrespective of the tax.
The only thing I can suggest is start doing things to reduce consumption. Something that should've been done without legislation but because it didn't happen, something had to be put on the books. Just because the price indictor (gas prices) are now pushing society in a better direction now doesn't mean that an additional push isn't necessary or desirable.
Posted by: aym | 02 July 2008 at 10:10 AM
Like to add one thing. The tax was supposed to add only 2.4c/L at the start of implementation. So why is the price at some pumps an additional 10c/L from the day before.
Looks like the tax is an excuse to gough the consumer some more and blame it on the government.
Posted by: aym | 02 July 2008 at 10:16 AM
RE:
Proportionality under NAFTA
This is reminiscent of the rich man who starves his children for the benefit of his spend thrift neighbor whose children use the wealth to waste and debauch.
Posted by: Axil | 02 July 2008 at 11:28 AM
It'll be interesting to see how this increase affects vacation plans, tourism, suburb housing costs, transit capacity/efficiency, and middle-of-nowhere big-box store revenue; things which cannot easily be accounted for in 'revenue-neutral' calculations.
In several cities, the sudden move to civic transport has been so crushing as to overwhelm the transit system leading to seriously deteriorated service and a rush-hour transit-grid-lock (i.e Portland). Though dis-incentives are useful in 'guiding' people to alternative means, it may be worthwhile to make sure those means are ready to handle the extra load.
Posted by: Jer | 02 July 2008 at 12:32 PM
The problem with many sector-specific taxes is that it 'feels out' new price points for supplies and distributors, usually leading to larger price increases than the tax allots for. This provides a scapegoat (gov't) for the suppliers and a mis-directed frustration for consumers.
It's a shame that we have to always use 'negative-reinforcement' (i.e. new taxes) as a means of convincing people to 'upgrade' their lifestyle to something more society-stable.
The point being that the 'system' seems to be out of creative ways to promote happy yet sustainable lifestyles.
Posted by: Jer | 02 July 2008 at 12:42 PM
So called carbon taxes were put on petrol and Diesel for 8 straight years running in the UK after the 1992 Rio Summit by at increasing fuel duty least 5% above inflation, rising to 6% when Labour came into power. So fuel costs were high even before oil prices began to rise. Despite an absolute trebling in the cost of fuel from around 40p/litre to £1.20/litre today, there is more traffic than before, not less carbon, so it has not really been a worthwhile strategy. It more of a way to get revenue from stealth taxes to feed into unrelated spending commitments. This is why people in the UK are becoming fed up with a so called green rhetoric to justify high taxes.
Posted by: Chilledgibbo | 02 July 2008 at 03:07 PM
In contrast to the UK it is interesting then that high gas prices in the US seem to be having a rather rapid effect. Why the difference?
Posted by: | 02 July 2008 at 06:11 PM
Because many of our vehicles get atrocious mileage, and on average we drive a lot farther per day.
Posted by: George | 02 July 2008 at 11:08 PM
456 km and i managed to pump 25.102L into a 04 prius, before the carbon tax kicked in (11:30 am) i was waiting in line for "cheap gas" and the wait was about 10 mins. It costed me $34.99 or $1.39 a liter. Now Average price is like $1.49 and $1.45 and the line ups begin happening.
I usually shop at chevron though :) the battery killers, cuz i'm hooked on their gas! it keeps the prius happy!
here in vancouver area we got this gimmick that you get 3.5 cents (sometimes more but with membership) off the sale price so realistically is why I got it at $1.39 after discount. It seemed when one did the promotion, all the gas stations started doing it, when its too cheap too be true, then they usually don't have that promotion going! But damn you already at their gas station and stopped!!!
Pays to be a hypermiler.
Posted by: philmcneal | 02 July 2008 at 11:40 PM
i meant to say 11:30 pm in my post!
Posted by: philmcneal | 02 July 2008 at 11:42 PM
Jer:
What is the average fuel consumption for personnal vehicles in England VS USA?
Could it be less than 50%?
Is it something like 35+ mph in England VS less than 17 mpg for the gas guzzlers in the USA?
If so, that may be part of the reason why higher fuel prices have more ffect in the USA than in England.
At $11+/gal it would be difficult to sell to many full size Hummers. Sales of large 4 x 4 and VUS have dropped drastically in the last 12 months while low fuel consumption cars like the Honda Civic are still selling well.
Posted by: HarveyD | 03 July 2008 at 06:18 AM
In 1992 Ross Perot had the idea of a 5 cent per year gas tax addition every year for a decade. After 10 years the Federal gas tax would have been 50 cents per gallon on $1.50 per gallon gasoline in 2002.
That might have made making more fuel efficient vehicles more attractive as consumers demanded more of them. But the way democracy seems to work in the U.S. is that no one will vote for a person that tells them what they should do. They vote for people that tell them what they want to hear...that oil will be plentiful and affordable for your whole life time.
Posted by: sjc | 07 July 2008 at 11:58 AM