On February 11, drivers' thoughts turn to gasoline prices. A barrel of sweet-light crude dropped to $34.00 US. Perhaps we'll get a break at the pumps? But, wait, check the price of regular posted at you friendly neighbourhood gas station. In Edmonton it's just gone up to $0.859/litre. But, most stations give a 3.5 cent per litre discount. So, really, its only $0.824
Talked to my neighbours Henry and Martha; they say we're just paying world price, so get used to it! Maybe....
On February 11 gasoline averaged $1.815 US in Montana Now there are 3.785 L/US gallon, and $1.00 US = $1.213 CDN. So they are paying $1.815X1.213/3.785 = 0.582 CDN/L.
Sure, you say, that's 24.3 cents a litre less than we're paying in Edmonton, but it's because of the taxes.
Well, not really! Let's remove the taxes.
On 1 gallon of gasoline in Montana, they pay $0.184US in federal excise taxes and $0.2775 US in state taxes.
That's a total of $0.461 US/gallon.
Subtract the tax, then do the conversion to $CAN/L.
So, for gasoline before taxes, they pay ($1.815 - $0.461)(1.213)/3.785L =$0.434 CAN/L.
In Edmonton the federal excise tax is $0.10/L and the provincial excise tax is $0.09/L and the total GST on both taxes is $0.095.
Total of the above taxes is $0.20 Subtract this sum from $.824/L and you obtain $0.624/L
Divide by 1.05to eliminate the GST on this difference.
So, for gasoline before taxes, we pay $0.624/1.05 = $ 0.594/CAN/L
Wait a minute, that's still $0.594 - $0.434 = $0.16/L more than in Montana just for gas before tax.
Last edited by Spade; Feb 12th, 2009 at 07:59 PM..