Home - Petroleum Products - Questions and Answers

Question: 17 
What is the relationship between crude oil prices and gasoline motor fuel prices?

Maximum fuel prices in this province are calculated based on the individual market price data of each of the regulated petroleum products: gasoline and diesel motor fuels, furnace oil, stove oil, and propane heating fuel. The Board does not use the price of crude oil in any of its pricing calculations.

Crude oil is the unrefined base product from which gasoline is derived and is traded on the commodities market as a stand-alone commodity. Global crude oil prices can be affected by a number of factors such as geopolitical instability, military actions in supplying countries, and global economic conditions.

Gasoline is refined from crude oil and also trades as a stand-alone commodity on world markets independent of crude oil. As gasoline is derived from crude oil we expect the price of gasoline to also be affected by the world price of crude oil. Other factors that may influence the price of gasoline as a traded commodity on world markets include refining capacity, refining and marketing costs, inventory levels, transportation and distribution costs, and supply and demand for the commodity. There may be a glut of crude available on world markets but a capacity problem in refining (for example, when refineries are shut down for repair or maintenance or in the case of damage to refining infrastructure due to a fire or hurricane) will reduce the supply and availability of refined products. This could lead to temporary spikes in market prices for refined products in the absence of changes in crude oil market prices.

 

Navigation Menu
Current Pricing
Historical Pricing
How Maximum Prices are Set
    Pricing Components
        Benchmark Prices
        Total Allowed Mark-ups
        Zone Differentials
        Taxation
    Zones
    Timing of Price Adjustments
        Weekly Adjustments
        Extraordinary Adjustments
        Suspension of Adjustments
Applications and Proceedings
Orders
Zone Map
Questions and Answers

 
     
 
 
About the Board
Commissioners
Legislation
Mandate and Lines of Business
Reporting Requirements
Disclaimer
Privacy Policy
Contact Us
  Public Utilities
Applications and Proceedings
Guidelines

Orders
Legislation
Compliance Filings and Reports
  Automobile Insurance
Applications and Proceedings
Guidelines

Orders
Legislation
Information Bulletins
Questions and Answers

  Petroleum Products
Current Pricing
Historical Pricing
How Prices Are Set
Applications and Proceedings
Orders
Legislation
Zone Map
Questions and Answers
 
 

Copyright © 2022 Board of Commissioners of Public Utilities. All Rights Reserved