Friday, June 15, 2007

A Question for Petro Canada

Every time I fill up with gas, I see those "Understanding Gas Prices" stickers on the pumps. When the started doing this a few years ago, they depicted "profit" as only 1% of the total pump price. Now leaving aside the fact that I'm sure the vague section called "refining and marketing costs" leaves ample room to hide additional profits (these are vertically integrated companies), this made the oil companies seem to be rather modest.

In 2005 the profit level rose to 2%, still meager, right? Now in the latest stickers I see that it's 3% of the price you pay at the pump. It still looks like a narrow slice, but then I thought about it, doesn't that mean that profit per litre has tripled in the last few years all else being equal?*

*Of course all else has not remained equal as gas prices have risen since they started this practice.

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