Who’s to blame for high gas prices?
As prices at the pump soar, we should stop the whining and get marching.
Here we go again.
News that Canadian gasoline pump prices popped just ahead of the Easter long weekend has ignited a national fit of righteous indignation, complete with huffing and puffing about the injustice of it all.
Along with hockey, whining about gas prices is a national sport in Canada. The obvious option of taking public transportation — or just not driving — doesn't really diminish the apparent pleasure of collective fuming about how much it all costs. Or how unfair it is.
Fuel prices that are immune from the market forces of supply and demand, it seems, are an inalienable right. And there are many who seem to feel that "The Government" should do something about it.
If this turns out, because of geopolitical upheaval in countries like Syria and Iran, to be a sustained price increase rather than a response to a seasonal spike in demand and transition from refining heating oil to gasoline, there's no question that higher pump prices could potentially have a negative impact on fragile, early stages of economic recovery.
Economists at the Bank of Montreal figure that a 30-cent rise in North American pump prices (to $1.70 a litre in Canada and $5 a gallon in the U.S.) could shave a percentage point from annual economic growth.
It also contributes to inflation and business operating costs all around.
If the situation is sufficiently dire for consumers — especially in an election year in the U.S. — President Barack Obama has the option of tapping his government's significant oil reserves to help ease retail prices.
But that's where the tampering should stop.
If central governments were to start artificially distorting a global commodity market and regulating a domestic one, it would require considerable resources - human and financial. And that would all have to come from tax dollars.
And, of course, everyone is keen to allocate more money to a new federal bureaucracy.
Given that many people think The Government has already come to play in too large and too interventionist a role in national economies as a result of the global financial crisis, its direct involvement in managing or mandating fuel prices would certainly set off a new round of complaints.
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