(May 22, 2022) The argument that Russia is responsible for the higher prices in Canada is a straw man argument, considering that Russia is a minor player in exporting oil to the western world. Russia's oil export may have a significant impact on the European countries. Why are we generally paying gouging prices for fuel if that is the case?
The more severe consequence of the inflated energy prices to power our vehicles is the exorbitant price for diesel fuel. The high diesel price can cascade the additional cost throughout the economy where we, the consumer, have to shell out our earnings to pay for most of the goods that we buy.
Unless the working class is unionized and the cost of living is included in their contract, their income will be adjusted to reflect the increased cost of living for non-unionized workers. Canadians will either have to work more hours to compensate for the increase in the cost of living or lose buying power. What about our Canadian Seniors who are on a fixed income. What options will they have? The future does not look too promising for them.
As mentioned earlier, many factors have to be considered besides Russian oil reserves. The western world has little or no dependencies on oil from Russia, unlike our European counterparts. So why is the price, especially diesel, so high?
The stakeholders set prices such as OPEC (Organization of the Petroleum Exporting Countries), The New York Mercantile Exchange and other investment institutions.
Canadian governments, Federally or Provincially, are reaping additional revenue through the base tax; the GST/HST has no incentives to intervene. You have to keep in mind that our elective representative represents the financial interests of the money people first and, every once and a while will throw a bone to Canadians to keep them quiet.
There is a dark side to this story. It is known that the airline industry will hedge, which means settling at a price for their fuel at a current price (while the fuel price is low) which allows them to keep their airfares to a minimum. However, it is possible that the significant fuel distributors hedge as well. The difference between the airlines and the fuel distributor, including mega trucking companies, is not passing the lower fuel price to the consumer even though they pay less than the Canadian consumer. In other words, they are milking it. They don't give a rat's ass that they contribute to inflation. It is not their problem.
The reality is that they are working against themselves because inflation affects consumer spending. If the Canadian consumer is buying less, the manufacturing industry has to scale back production resulting in layoffs. So an economy that is doing well can fall behind very quickly if Canadian consumers are not buying.
What is the solution that puts control back into the consumer's hands? There are two strategies one, initiate a general strike and run on the bank, meaning you go to withdraw all of your money from bank x, y, z.
Extreme measures for extreme corporate greediness, while draconian, it will work. The only way to make a capitalist understand is to hit them in the pocketbook.
