The economy vs photography

[DougAxford]

" OPEC is bleeding us dry."

You might want to look at the oil corporation profits for the past few years - billions & billlions. We're being bled by corporate greed led by a US Pres/VP who are both (former) oil tycoons.

I was in Calgary a month ago and gas was higher than southern Ontario at 1.07/litre (US$4.10). Now that is sick when it's a few miles from one of the world's biggest oil reserves.

There is one upside to all this. When a customer complains about our prices, I simply say, "ya, and it cost me $60. to fill my tank this morning" . That seems to shut them up. My wife & I went to the Spring Garden Show in Toronto (all indoors) yesterday. $20 for the two of us to get in, $15. for parking and $35. for gas. It's affecting all of us.

[KevinStecyk]

Originally Posted by ChrisPerry

I also find it interesting that while oil is up in price, so is electricity (fired by coal, nuclear and natural gas) and natural gas itself is up...why?

Natural gas and oil are substitute products for many electrical generation units. That means, when the price of one gets too high, they switch to the other.

The energy content in oil versus gas is about 6:1. So that implies that with oil at $100, then natural gas should trade at about 16.70 per GJ.

NEB - Statistics - Energy Conversion Tables

A thousand cubic feet (Mcf) equals 1.05 GJ. Or for our discussion, a thousand cubic feet of gas equals one GigaJoule.

Even though energy equivalence is about a 6:1 ratio, natural gas often trades at between 6-10 to 1. Oil is a fungible product that can be readily transported anywhere in the world. Natural gas tends to be localized to the continent, though that is changing with LNG (liquid natural gas). So this energy equivalence doesn't always hold true. However, as oil prices trend higher, so will gas.

Best regards,
Kevin

[KevinStecyk]

Originally Posted by DougAxford

" OPEC is bleeding us dry."

You might want to look at the oil corporation profits for the past few years - billions & billlions. We're being bled by corporate greed led by a US Pres/VP who are both (former) oil tycoons.

And it costs billions and billions to find new oil. Just look at Alberta's oil sands plants.

Originally Posted by DougAxford

I was in Calgary a month ago and gas was higher than southern Ontario at 1.07/litre (US$4.10). Now that is sick when it's a few miles from one of the world's biggest oil reserves.

No, that's the markets working or not working, depending upon your point of view. Western Canada has only a few refineries and a captive market, so the companies can charge more than they do in Ontario.

Originally Posted by DougAxford

There is one upside to all this. When a customer complains about our prices, I simply say, "ya, and it cost me $60. to fill my tank this morning" . That seems to shut them up. My wife & I went to the Spring Garden Show in Toronto (all indoors) yesterday. $20 for the two of us to get in, $15. for parking and $35. for gas. It's affecting all of us.

You could also mention that the price of gold, silver, wheat, corn, natural gas, insurance, coffee, sugar, houses over the last several years (though correcting now in certain North American locations) and food stuffs in general have all gone up in price. Yet according to government statistics, inflation is low. As long as you don't eat and don't drive and don't need shelter, inflation ain't too bad.

Best regards,
Kevin

[ChrisPurves]

We all know it's hard to take the high prices. But for me the photo business is allowing me to feed my habit. We making money so we can spend some of it on new equipment.

Our last show was in Calgary, at $ 1.07 ltr for gas. Our gas bill there and back (8 hours each way) was about $ 240.00. At today's price ($ 1.21 - almost $ 5.00per US gal.) that would be an increase of 13% or $ 32.00. Other than that everything on the trip is pretty much the same so the increase in fuel is only about 2% increase in the trip. I am about to raise my print price by $ 5.00. That is a $ 13% increase in sales. In conversation with the customers I am attributing it to the gas prices and everyone so far is nodding their heads knowingly and agreeing. Most of my customers travel to the shows as well so they know already about the high prices.

Now the good side of all this. The CDN dollar is stronger, the fuel prices are up, forestry in this area is in the crapper because of the weak US housing market and the pine beetle epidemic. I have just completed the purcahse of a new 1 ton diesel truck. $ 63K in Canada, $ 48K for the same truck in the US. I am under $ 50k for the truck so there is an upside albeit a little one.

Cheers
Chris

[Ian_D_Griffiths]

These gas/diesel prices make me smile, a real big smile, plus some of the reasons given for the 'high' price.

Here in Blighty (UK), today I paid £1.13 (US $2.24) for a litre of Diesel, thats $8.06 per US gallon or $10.15 for the Imperial gallon, my van achieves 32 mpg, that's $0.32 per mile, my car (2.2ltr Vauxhall Signum med size saloon) achieves 48mpg or $0.21 per mile.

Now, the real reason your prices have gone up so much, just like ours? Its paying for the war in the Gulf and Afgahnistan through taxation. (Just to head off the complaints, this is not a political statement and has no bearing on my feelings about the two wars) this is just a very convienient way for government to use a third party to blame for the price increase.

There was recently an article on the BBC that showed that 74% of the cost of gas/deiesl in the UK was tax.

We all know that if printing for example doubled in price, this would not reflect a doubling in our selling cost of said print, the print cost is just one indicator that influences our prices. The same goes for oil prices.

[LeeHammond]

The increased cost of fuel is pushing up prices of almost everything that has a distribution cost, of course. The average total [fed and state] tax on gasoline is still rather low: $0.47, from http://www.api.org/statistics/fuelta...mary_pages.pdf

I would argue that gas is still not expensive enough. People still sit with their engines idling, just to keep warm; still use the drive through coffee shops and ATMs.

I do not believe we have even started to pay for W's wars. They are being paid on credit, mostly from China.


Lee

[ChrisPerry]

Originally Posted by Ian_D_Griffiths

Now, the real reason your prices have gone up so much, just like ours? Its paying for the war in the Gulf and Afgahnistan through taxation. (Just to head off the complaints, this is not a political statement and has no bearing on my feelings about the two wars) this is just a very convienient way for government to use a third party to blame for the price increase.

There was recently an article on the BBC that showed that 74% of the cost of gas/deiesl in the UK was tax.

Here when gas as $1.24 a gallon the tax was 44c per gallon. Now that gas is $3.29 gallon tax is still 44c a gallon. The taxes here on fuel are for highway, bridges and the like, not for the war, miliatary or to direct behavior, like the high taxes on cigarettes are there to discourage smoking.

Prices have gone up here 20c a gallon in the last two weeks, yet the news reports that supplies of gasoline are near record levels and consumption is down for the second month in a row.

Gas prices used to fluctuate a few pennies a week one way or the other - 2 or 3%. Now 5 to 10% moves in a week are not unheard of. Something fishy there IMO.

And have you noticed over the last few years that the prices hit an all time high and back off 20c, and then in 2 months surge to another high and back off to what was the last 'record'. It's consumer training by the greedy oil companies. "Hey, $3.20 ain't so bad. Last month it was $3.43" is what' we'll be saying next month.

Simple math: A barrel of oil yields 28 gallons of gas. If oil is $110/barrel then gas is $3.92 a gallon. Plus distilling, additives, transport, overhead, markup and profit and tax...

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