Motorists and consumers are no doubt thrilled that gas prices have fallen to their lower level in four years (the 80¢-90¢/litre range) and prices could stay low for months.
They also want to know what lower gas prices will mean for them? Will it affect my car purchasing decisions? Why aren't diesel prices falling in tandem with regular gas?
First off, I empathize with consumers and their need for answers. It's an uncertain time in world oil markets, and geopolitical events are influencing the price we pay for gas at the pumps.
Secondly, low gas prices affect the whole economy, not just car buyers and dealerships. Whether you're buying a quart of milk, a new widescreen TV or a new car, the cost of those products is partly determined by how much it costs to ship them to the stores.
Here is some commentary on gasoline and gas prices:
1. When choosing a new vehicle, don't look at today's gas prices. Fuel economy should be a consideration when buying a car, but don't buy a gas guzzler just because gas is 80¢/litre. Take the long view (look where gas prices have been over the past four years and where they are likely to be in six months and beyond).
2. There's a misconception that premium is better for all cars than regular or mid-grade gas. Not so. A certain percentage of vehicles require premium gas. It's best to consult your owner's manual about what gas to use. Experts say that if premium gas is recommended, it's probably okay to use regular. But ensure that regular gas won't alter car engine's timing or affect your warranty coverage.
3. One of my pet peeves about gas companies is that they don't post the prices of all of the fuels that they sell. They only post the lowest price gas. Consumers should be able to compare prices before they drive into the gas station. There are rules about full disclosure on the pricing and advertising of automobiles - why not for the sale of gasoline, too?
4. In Ontario, 2.6 per cent of the province's $118.9 billion in revenues (2014-15) will come from gasoline and fuel taxes. Within the next five to ten years, that percentage will go down as more hybrid and all-electric vehicles come onto the market. How will that revenue shortfall be made up?
5. The price of diesel fuel isn't dropping at the same rate as regular and premium gas and that's left many motorists (especially truckers) fuming. I question the huge gap between the cost of regular and diesel gas. Industry spokespersons say that this disparity is because diesel supplies are low and demand is high. But I don't buy that argument - demand for diesel doesn't change significantly from month to month. Oil producers are producing the quantity of diesel fuel that the economy requires, no more, no less. I think the government should look into this and demand answers.
6. Another pet peeve is gas nozzles at gas stations. Most stations use a single hose/nozzle that accommodates premium and regular fuel. Since residual gas stays in the line whenever it's used, the next person pumping gas gets some of the previous customer's gas in his/her tank (diesel fuel has its own hose). Why aren't there separate hoses for premium and regular gas?
7. Motorists should take the money they're saving on gas today and put it away for a rainy day. Top up your RRSP. Pay down high-interested credit card debt. These savings could amount to hundreds (if not thousands) of dollars per month. Gas prices will go up again, so put that extra money to good wise use while you can.
I welcome your thoughts.