The politics of gasoline prices

This spring Ontarians, rural residents in particular, felt the pinch of high prices at the gas pumps.  Naturally, a provincial election recently concluded where the party with the most ambitious plan for lowering gas prices, Doug Ford’s Progressive Conservatives, won the plurality of the vote.

Arguably however, elected politicians should not be attempting to lower gasoline prices.

Like most commodities, gasoline is priced based upon supply-demand market economics.  Unless someone can demonstrate the existence of laws or monopolies that are intended to stifle gasoline pricing competition (like laws that purposely diminish competition in the dairy and pharmaceutical industries), it stands to reason that gasoline is fairly priced at the most affordable level allowing the least amount of wasteful consumption of limited resources.

That argument is of course cold comfort to those who are barely or unable to afford transportation.  But for those in dire need, sound public policy will focus on boosting their overall incomes, not on arbitrarily lowering the prices of some of their needed commodities (as per notorious central-planning economics).

Gasoline is subject to special taxation, but with every tax the question is, which Ontarians are getting the money from the tax?  Perhaps MPP John Yakabuski was onto something when he suggested that more gas tax money should go to rural Ontario.  But responsible policy-makers will avoid the cheap retail politics of attempting to lower gasoline prices for everyone, as the wealthiest Ontarian motorists need no such crude gift.

Stefan Klietsch

Renfrew