Cheap gas in Calgary a doubleedged sword

Cheap gas in Calgary a double-edged sword It’s taken a while but the low price of oil is finally starting to be reflected at the gas pumps.Most stations around the city are selling a litre of unleaded for less than 70 cents for the first time in seven years, but it’s a double-edged sword.Consumers win because it means they can travel further for cheaper and that includes airlines and cruise ships because if their bottom line is lower, they can offer better deals.But Bill Gwozd, senior vice president of Solomon and Associates, says those benefits end when you consider job losses as well as the fact the government takes in less tax on gas if it’s cheaper, which means less money for roads, schools and hospitals.“Should we as a society aim for really low prices to allow people to travel and go on their holidays at a lower cost, or should we have higher prices, export the product and capture higher revenue so governments get strong, stronger jobs and stronger growth?” he asked, adding there are arguments for shutting off the taps in Alberta, to drive up demand and cost, much like wheat and dairy and boards already do.“I really think governments have a role to stand up and do a macro adjustment to the supply/production side,” he said. “The United States being a net consumer wouldn’t like that idea; it would have to be the producing countries.”He believes the price of oil needs to be a bit higher than it is now in order to balance consumer and manufacturer costs against production jobs and government tax revenue.“People in the production side are losing their jobs and if they’re losing jobs that means there’s going to be less oil in the future and if you want to have lineups and outages because there isn’t enough to go around, that’s the consequence, so how do you balance that?” mulled Gwozd. “You really have to have enough money going back to the production side to offset the potential consequences.” AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email (Courtesy: Thinkstock) by Jonathan Muma Posted Jan 20, 2016 8:02 am MDT read more