About two decades ago crude oil was trading at $20 per barrel and prices at the pumps were 55 cents a litre.
Taxes did not change much since that time but the carbon tax was added.
Currently West Texas Intermediate (WTI) is trading below $27 per barrel and Western Canada Select (WCS) is at $13.75 per barrel (a 50 per cent discount, as compared to a 20 per cent discount in the past).
Gas prices in places like Edmonton, AB and Calgary, AB are below 70 cents a litre and falling, even in Prince George, BC prices are under 80 cents a litre.
On the worldwide scale there is currently an over production of over 1-2 million barrels per day and storage of crude oil exceeds over 1 billion barrels and is estimate to rise by an additional 260-plus million barrels in 2016.
That amount in storage means if all oil production, in the whole world, would be shut down in one day there is enough in storage to keep the world going for almost 2 months before running out.
The US has inventories of crude of levels not seen in over 8 decades and one company is offering to “buy” your crude if you give them 50 cents a barrel.
In context that would be the same as you and I going to a store and “buying” their product but the store giving us money to take the product home.
How long would those stores keep their doors open?
Now the question is if/when crude falls further to $20 a barrel for West Texas and below $10 for Western Canada select will we see prices at the pumps of 55 cents a litre again?