Gas price rage

All the gas stations charge the exact same price at the exact same time. How do they do it?

One of the truly disconcerting things about being on the wrong side of 60 is the memory of when things were way, way cheaper than they are now. Or at least they seemed to be.

I grew up in Goose Bay in the ’60s. My best buddy was Tommy Coates, whose father was the manager of a Hudson’s Bay store. They had a bit of money. We were still in high school – 1966ish – when Tommy bought himself a ’56 Ford Custom with a honking big V8 that burned as much oil as it did gas. Picture it – great clouds of thick blue smoke billowing from the dual tailpipes, under immense pressure, whenever Tommy floored ‘er, and he floored ‘er a lot. Think of the space shuttle lifting off. Shock and awe. God, we loved that car.

Tommy would hand the guy a dollar bill and say, “Put a quart of 30-weight in ‘er, and give me the change in gas.”

Anyway, on our way to the RCAF Base to see a movie or hang out at the snack bar, we’d swing into the service station. The attendant would come out to the car (remember that?) and say, “What’ll it be?” Tommy would hand the guy a dollar bill (remember those?) and say, “Put a quart of 30-weight in ‘er, would you, and give me the change in gas.”

No kidding.

The quart of motor oil cost maybe 39 cents. The change would get us enough gas to tool around, being cool, revving the big V8, all evening. Thirty-odd cents a gallon, the gas cost. Gallon, mind you. Four and a half litres.

Those were the days, my friend.

I know what you’re thinking. There were people working for as little as 35 dollars a week at the time, and a full tank would cost them close to a day’s pay. A person working for minimum wage today – pretty much the same.

The difference is, back then, the price was stable. You could depend on it. It might be creeping up slowly over time, but so was everything else. Its price behaved like the prices for everything else that people bought day in and day out.

Maximum price! What a joke

These days, it’s up and down like a dog’s stomach. If it wasn’t regulated by a maximum price (what a joke – has it ever been below the max?) it would be ratcheting up and down even as you filled your tank.

The New York Mercantile Exchange, they say, or at least used to. You don’t hear that much anymore. They’ve moved on to other vaguenesses. Supply and demand. Unrest in the Middle East. Market speculation. Royal Wedding.

Give me a break. I’m surprised The Rapture didn’t set off a spike.

I’ll tell you what it is. It’s the golden rule of capitalism – you charge whatever the market will suffer. Whatever you can get away with. My mother used to say, “I don’t know where they get the face!”

It’s the golden rule of capitalism – you charge whatever the market will suffer.

The price goes up on the commodity exchanges or wherever, and the local boys, the same day, hike up the price for a product that’s sitting in a big tank under the gas bar, or in a bigger tank on the Southside Hills. How’s that work?

Imagine if the price of wheat went up on the New York Mercantile Exchange, and 10 minutes later, Manna Bakery started re-pricing the bread on their shelves. We’d be like, WTF? There’d be riots.

Or people would simply go to another bakery. But what if the price went up in all the bakeries by the exact same amount at the exact same time? Well now, you’d have to assume the bakery owners were in cahoots, wouldn’t you?

And it sure smells pungently of oil companies being in cahoots too. I know, I know, the Competition Bureau said there was no evidence of price fixing. Duh. Do you suppose anyone smart enough to run an oil company would be stupid enough to leave a file labelled “Price Fixing” lying around?

They’d be idiots to advertise what they’re doing. Can you just hear Nancy Walsh on CBC reading the PSAs – “The regular weekly meeting of the (air quotes) Friends of Petroleum will be held in Bob’s black Escalade in the rear parking lot of the Pippy Park Golf Club on Thursday at 2 a.m. Refreshments will be served. Bring your own cards and baskets.”

But they’re not, in fact, price-fixing. We’re told. No evidence. OK.

How do they do it?

If they’re not coordinating with each other, how do they do it? There are dozens and dozens of gas stations in St. John’s. Maybe hundreds. Have you ever wondered how they all manage to have the same price posted bright and early on the same morning, every time?

The only way I can imagine it working is that each oil company has a designated person, more likely a team, driving around all night, all over town, over and over again, checking out each and every gas station marquee, to make sure no one is charging anything different from anyone else. They’d have cell phones, to keep in touch with their supervisors. The protocol, I imagine, would be: if anyone puts their price up, we’ll match it. If anyone puts their price down, call the general manager’s home and get him out of bed. We’ve got a crisis.

Oil company shareholders have to put gas into their BMWs, so they’re feeling the pinch too.

Gas prices. Don’t get me started. Not that I don’t understand that the oil companies have their problems, too. They’ve got to watch their bottom lines, of course, and their costs keep climbing like yours and mine. After all, those dirty big tanker trucks that deliver gas to the gas stations, their engines burn diesel fuel, and well, you know diesel is climbing all the time too, just like gas.

No, I get it. Oil company shareholders have to put gas into their BMWs, so they’re feeling the pinch too. And they’ve got to heat their mansions.

But it’s not just the oil companies. If it’s possible to be any madder, I’m even madder at the provincial government.

On the bill from my last fill-up, oh look at this – $10 in HST. Furnace oil is no different, only the tanks are way bigger. My last delivery – another $67 in HST. Sacred Heart! I’m pretty sure that’s what Tommy paid for the ’56 Ford.

HST by the truckload

I imagine the people who count the money at the Department of Finance have been putting in a nice bit of overtime lately. Even 13 per cent of an obscene amount is pretty obscene. They must order pizza and champagne every time the price of gas or furnace oil hits another hitherto-undreamed-of high, because the oil companies take the heat while governments rake in the cash.

Cut the chatter, boys, and keep counting. We’re falling behind. The Brinks trucks are lined all the way back onto Higgins Line.

There’s no HST on groceries. Why? Well, because groceries are necessities of life, and it’s not right to tax the necessities of life, is it? Furnace oil? Well, a warm home isn’t really a necessity of life.

You’ll just have to lay off the gardener and one of the maids.

Just to show a sense of fair play, I readily admit the province has its own problems. It’s got to watch the bottom line too. After all, they’ve had to hire all that extra staff in the HST revenue counting department. Plus, the province runs thousands of vehicles, and they all burn gas. Just the HST on that gas … well, you get my point.

So no, we can’t really afford to take the HST off gas and furnace oil. You’ll just have to lay off the gardener and one of the maids.

There’s only one ray of hope. Costco is opening a gas bar. Big one. Word on the street is it will be six to eight cents cheaper than the others. There are a half dozen excavators going crazy over there right now. I can hear them from here.

I can’t wait.

There’ll be 40 or 50 cars and trucks lined up 24/7, windows down, OZ-FM throbbing, engines idling away as we all wait 15 or 20 minutes for our turn to fill up.

It’s going to be great. We finally get to give all those other shaggers the finger.

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