With tensions rising in the Middle East, especially with Libya (an oil rich nation) on the brink of possible civil war, the price of crude is rising once again. It is unclear how high oil prices will go but if the first half of 2008 was particularly hard on your pocket book, expect another shock.
Prices have increased by nearly 7 cents/L since the beginning of this month and that number is expected to increase unless tensions in the Middle East are soothed. Libya supplies the world with roughly 2% of its oil daily. With the taps currently closed off due to civil unrest, 2% there means increases in oil pricing here.
Fears are on the rise that other oil producing nations in the region could follow a similar path to the instabilities shocking Libya. In Canada, where the price of oil is particularly high due to intense taxation on oil by our government, increases in the price of gas at the pumps means less in our already nearly empty pocket books.
It’s a shame that in times like these our government doesn’t give us a floating tax rate to keep the prices of gas at a relatively stable level. If gas were to stay for a 5 year period at a single price–say $105/L by adjusting the amount of tax placed on gas–our citizens might feel more secure. It would work this way: If gas is priced higher on the international market, it is taxed less here at home–if it is priced lower on the international market, the government could tax it higher here to maintain an even price at the pump for any given amount of time.
People need to be able to plan out their finances to stay afloat–especially in Canada where the average debt to earnings ratio is increasing. Many people rely on their own transportation to get to and from work. If people cannot be sure how high gas prices are rising or when they will rise then changes like the ones we are seeing now can become particularly burdensome and stressful to many Canadian taxpayers.
If you agree that a floating tax rate at the pumps will help many Canadians to stay afloat, copy this article and send it to your local MLA and your local MP.
~ Justin A. Philcox