The oil companies are pumping us billions

There is a good reason why motorists feel ripped off when filling up.

Since the beginning of 2021, petrol at the pump has exploded by 100%, from 111.8 cents to 223.9 cents, up 112.1 cents per litre. Analyzes predict that we will soon exceed $2.30 per liter.

All reasons are “good” to justify the recent surge in the first five months of the year to allow the oil majors to continue siphoning off motorists.

I’m thinking, among other things, of the European embargo on Russian oil following Vladimir Putin’s invasion of Ukraine, the resulting surge in oil barrels, oil refineries running at full speed and struggling to meet global demand since the embargo on oil from Russia, inflationary pressures, etc.

Coincidentally, little is said about the oil companies’ insatiable appetite to profit from the embargo on Russian oil and stuff immense profits into their pockets.

  • Listen to Michel Girard’s business editorial live every day at 6:50 a.m. at QUB radio :

THANKS NEW YORK

A barrel of US WTI oil is trading at $119 today compared to $49 in early 2021, up 145%.

That same increase was passed on in the calculation of the “minimum acquisition cost,” which is the wholesale price for a liter of gasoline at the Montreal loading dock. This “wholesale price” includes the cost of a barrel of oil and the refining margin.

The problem? Although Canadian oil is cheaper than WTI and much of the refining takes place at our refineries, Quebec’s “minimum acquisition cost” is based on New York Harbor gasoline prices, which are based on US WTI.

The reason given? We must follow the world market! final point.

OPERATOR

Everyone in the oil industry, from producers to refiners to wholesalers, has been making gold deals since last year. While it’s true that oil companies have reported heavy losses in 2020 due to the COVID-19 pandemic, let’s just say they managed to bounce back royally in 2021.

Take Suncor Energy, our big oil company, present at all levels of the oil chain (exploration, production, refining, distribution), its profits could reach $11 billion this year, according to Zonebourse analyst forecasts. That’s more than double the 2021 profits of $4.1 billion.

The other major oil company on Canadian soil, Imperial Oil Limited, could post profits of $6.2 billion, or 2.5 times last year’s profits.

Valero Energy Corporation, which owns and operates the Jean Gaulin refinery in Lévis, may see its profits exceed $6.5 billion in 2022.

Let’s take Shell PLC as an example internationally. According to analysts, profits could surpass $40 billion this year.

This is the big jackpot for all oil companies without exception.

While motorists are literally being tapped at the pump, oil company shareholders are getting richer and richer.

The energy sector sub-index is up 43% year-to-date. And that’s after a 42% gain in 2021.

  • For more from Michel Girard, listen to his live editorial daily at 6:50am on QUB radio :

AWARD OF THE OIL COMPANIES?

Boris Johnson’s government intends to impose a special tax of 25% on oil and gas company profits, in order to distribute the benefits of this measure to the poorest households.

Here in Canada, levying such a tax on our oil companies’ profits could be passed on to motorists!

Leave a Comment