Compare gas prices

[Chris Auld]

I am not entirely sure what the price elasticity of smoking has to do with the price elasticity of gasoline. That said, increases in the tax rate on tobacco are one of the primary reasons smoking rates have declined in the past few decades. An enormous amount of evidence indicates that a 10% increase in the price of tobacco causes a 5% or so decrease in tobacco consumption. Whether that effect is as large as "hoped" depends on what one hopes, I suppose.

It isn't true that gasoline consumption doesn't respond to changes in price. In the long run the evidence suggests that a 10% increase in gas prices causes a decrease in demand approaching 10%. So an increase in the tax on gas would indeed substantially reduce consumption and the attendent negative effects.

As I said, the other side of the dual benefit from taxing gasoline is precisely that it's a "tax grab" -- the revenues from gasoline taxes substitute for other taxes. If you don't "like being grabbed in that spot" then you should consider which other taxes you'd like to see increased instead.

[sharkman]

By that logic gas consumption should already be reduced past zero. Gas was once .30/ltr, since its about 3 times that now, funny how we are all still driving. Semi trucks still clog the roads delivering whatever, ships still ply the waterways bringing all manner of cargo, etc. Personally, I haven't reduced my gas consumption 300%. Actually I went from a 4 cylinder engine to a v6. So I don't see how this reduced consumption you mentioned is quantifiable.

On taxes, the feds are getting HUGE surpluses. So I don't quite understand the notion that we must raise taxes on gas or they must be raised somewhere else. The study you mentioned suggesting gas tax could be doubled was no doubt done in a vacuum. The effect on our economy would be disasterous. Tax revenues would shrink as the effects of this inflation were felt.

[Chris Auld]

No, "that logic" does not imply that "gas consumption should be reduced past zero" as a matter of simple mathematics. And no, the *real*, that is, adjust for inflation, price of gasoline has not changed by anywhere near 300% even since the 1950s.

The "reduced consumption I mention" is indeed "quantifiable," and has been quanitified in hundreds of econometric studies. Again, these studies suggest that the long-run price elasticity of demand for gasoline approaches unity; that is, in the long run a 10% increase in the price of gas leads to almost a 10% reduction in consumption.

Notice that your move from a 4 to a 6 cylinder engine depends on more than just the price of gasoline. Would you have been more or less likely, other things (such as your income) equal, to buy a car with a larger engine if the price of gasoline had been even higher?

[sharkman]

Yes, we still would have purchased a v6 although we have limits. But I'm in a catagory with higher disposable income so maybe I wouldn't react as some. Let me ask you this, since you seem pretty up to snuff on these things, how can there be a reduction in consumption when the over all consumption must have gone up from '95 to '05. Or would it be based on what people might have consumed at a lower price, and thus they compare that higher consumption rate vs the actual rate.

[Chris Auld]

I don't know off the top of my head what's happened to consumption of gasoline in Canada over the last ten years. But the assertion that, other things being equal, an increase in the price of gas reduces consumption of gas would not be inconsistent with the observation that gas prices and consumption have both trended up over time: Consumption is affected by many factors *one of which* is price. Put differently, consumption would have gone up *even more* if prices had stayed the same rather than going up.

Recall what happened during the two OPEC-induced price spikes in the 1970s. Did gasoline consumption rise or fall? Did huge cars with V8s become more or less popular?

[mrhooie]

103.9 - 105.9 in Yellowknife right now

[sharkman]

In the 10 years since 1995, gas consumption has gone up, because of SUVs, the dirge of enviromentalists. Of course, the trend is changing.

[farscaper]

One of my good friends just got a new VW Jetta diesel for a company vehicle. He made his first Vancouver - Calgary trip. He took the long way through Cranbrook on the way there and went through Kamloops on the way back. He made frequent stops to visit customers. He is a lead-foot. He came back and told me that it only cost him $39 of fuel for the return trip. He loves the car.
Oh ya. He did about 2200 kms.

[Nuje]

OK, having a VW TDi myself, I have to set the record straight here: while these engines do get phenomenal mileage, 2200km using $39 worth of diesel is a bit over the top.
$39 in diesel EACH WAY is indeed plausible (I just drove 1000km from Vancouver Island to Prince George and just filled up for $45; my instrument cluster shows instanteous as well as average fuel consumption and it's typically around 5.0L/100km driving at 100-110km/h on the highway; a little over 6L/100k driving 130+km/h on the freeway - and the same for driving in town.

My trip to PG, with a bike on the back of the car - not the greatest for aerodynamics - is the best I've done on an extended trip; not being on a freeway and thus driving around 100km/h most of the way helps fuel economy quite a bit.

Using approx. 45L of fuel to go 2200km I don't think is even possible with a smartcar, let alone a 1.9L engine (that still produces around 170 ft-lbs. of torque )

[farscaper]

I'm going to have to give my buddy a piece of my mind, which isn't much lately.
I should have checked the math.
That said, 5 to 6L/100km on the highway, holy crap.
How has the reliability been on the TDI?

[Nuje]

VW engines are EXTREMELY durable - and the diesels even more so. It's nothing to put 300-400,000km on one of those engines. Being that they're engineered to run at up to 160-200km/h for hours at a time on the autobahn, letting them run at 100-130km/h like we usually do on the highways here is almost like babying them.

The TDI has to use a very specific grade of synthetic motor oil, and it goes for almost $9 a litre; only has to be changed every 16K km, but it's still a lot more than the $20 (4L of oil plus filter) I was used to paying before.

Mine has been perfect engine-wise (I've had a couple electrical gremlins, but nothing to get worked up about); and it's as quiet as the standard 2.0L gas engine out on the highway. Since getting mine, I've been pimping these to anyone interested in a new car; I can't believe everyone doesn't give the TDI a serious look.

[sharkman]

One thing about diesels, they don't smell so good. I've heard they have better power than they used to, my dad had an '87 jetta diesel back in the day and it was gutless.

[Nanuuk]

I believe diesel technology has changed considerably to that power is not sacrificed. I read somewhere that diesels were the predominant or were becoming the predominant fuel system in Europe. For some reason, North Americans haven't really bought into them yet in a big way. Perhaps with the new hybrid gasoline engines, we never will.

[Monobloc]

Two main reasons diesels have never picked up here. Gas is cheaper than Europe, so not much reason to put up with the soot, hard cold starting, smell, noise and rattling of diesels. Although they are getting better (at least in cars), the trouble nowadays is that they pollute the environment worse than gasoline engines do. Those high NOx are a big part in the creation of smog.

You can't even buy a new TDI in California, New York, Massachusetts, Maine or Vermont. They don't pass emissions requirements. With Ontario's ozone days and summer smog days, I wouldn't be surprised if they got rid of diesels some day too.

[CTVdude]

just came back from Swiss...



And BTW... Swiss Francs are at par with Canadian $$

notice how diesel is much more expensive?