Gasoline is an incredibly important substance created from crude oil and is used to fuel a large quantity of automobiles in the present day. The average cost of Regular Unleaded Gasoline in Ontario in February of 2020 was 111.65¢/litre. However, in just the span of two years, the cost of gasoline has managed to dramatically increase. The average cost of Regular Unleaded Gasoline in Ontario as of March 2022 was 176.92¢/litre. What is the cause for this increase in gas price, and what is the government doing to mitigate this increase?
The Russia and Ukraine conflict has left the oil market in shambles. Russia is the world’s third largest oil producer. In fact, the country exports about five million barrels of oil each day, which accounts for about 11 percent of the global supply. When Russia decided to invade Ukraine, there was immense pressure on the cost of oil. This was due to the fact that many traders, shippers and financiers boycotted Russian oil, which left a large quantity of oil out of the global supply chain. Furthermore, with the ease of the pandemic, the demand for oil is increasing. The increase in oil demand also raises the price of the oil, since there is not enough supply to keep up with the market.
The Ontario government has brought forth new legislation, which would lower the provincial gas tax by 5.7¢/litre and the fuel tax by 5.3¢/litre. This legislation would be in effect for six months, and if passed, it would take effect in July. Vehicle owners in Ontario would be positively impacted by this legislation. For example, the proposed gas tax cut and the elimination of licence plate renewal fees would help save a family that owns two cars by about $815 in 2022. Those who do not own vehicles will also benefit from this legislation, as the price paid for taxis, food delivery and consumer products will be cheaper.
Works Cited
Fox, Chris. “Cost of Gas in the GTA Could Hit $2 a Litre next Month as Russian Attack on Ukraine Impacts Oil Prices: Analyst.” CP24, Bell Media, 24 Feb. 2022, https://www.cp24.com/news/cost-of-gas-in-the-gta-could-hit-2-a-litre-next-month-as-russian-attack-on-ukraine-impacts-oil-prices-analyst-1.5794188.
“Fuels Price Survey Information - Ontario Data Catalogue.” Fuels Price Survey Information - Datasets - Ontario Data Catalogue, https://data.ontario.ca/dataset/fuels-price-survey-information.
Hopper, Tristin. “Why Canadian Gas Prices Are Higher than Ever (It's Not All Ukraine).” Driving, Postmedia Network Inc., 14 Mar. 2022, https://driving.ca/auto-news/driver-info/why-canadian-gas-prices-are-higher-than-ever-its-not-all-ukraine#:~:text=The%20world%20economy%20is%20reopening%2C%20and%20it's%20thirsty%E2%80%A6&text=On%20the%20eve%20of%20the,more%20oil%20as%20a%20consequence.
Jake Horton, Daniele Palumbo & Tim Bowler. “How Reliant Is the World on Russia for Oil and Gas?” BBC News, BBC, 19 Apr. 2022, https://www.bbc.com/news/58888451.
“Ontario Cutting Gas and Fuel Taxes For Six Months To Provide Relief For Businesses and Families.” Ontario Newsroom, 4 Apr. 2022, https://news.ontario.ca/en/release/1001937/ontario-cutting-gas-and-fuel-taxes-for-six-months-to-provide-relief-for-businesses-and-families.
Yun, Tom. “High Fuel Prices Are Here to Stay, Experts Say.” CTVNews, Bell Media, 5 Apr. 2022, https://www.ctvnews.ca/business/high-fuel-prices-are-here-to-stay-experts-say-1.5848814.
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