Canadian Personal Finance Blog

Archive for the ‘Gasoline’ Category

Reader’s Note: Random Thoughts will return next week.

Also, watch for the First Big Cajun RRSP Software Giveaway! Coming real soon (once I figure out how it is going to work ).

Gasoline Pumps Inflation

Stats Canada announced the CPI for January and it looks like Inflation is starting to become more of a factor for the Bank of Canada to think about. Year over year for January Consumer Prices were up 1.9% (remember that in December year over year it was 1.3%), so the 0.6% jump is a big one.

Black Gold, Texas Tea

Yes, it is Gasoline prices that are helping fuel this inflationary jump, and this could mean follow on price increases as this price increase percolates through the system.

The increase in the all-items Consumer Price Index (CPI) was due primarily to gasoline prices. In January, gasoline prices were 23.9% higher than they were in January 2009. This follows a 25.6% rise in the 12 months to December 2009.

Gasoline prices exerted upward pressure on the CPI for the third consecutive month, as a result of price volatility in the second half of 2008 and the first half of 2009. Prices at the pump have been relatively stable since July 2009.

More importantly the Bank of Canada’s Core rate (which is what they start looking at for when they wish to increase interest rates) is now around 2.0% (year over year) up from 1.5% in December, which may cause the Bank of Canada think tank to start re-thinking when they plan on turning on the Interest Rate economy brakes, which most think is June July timeframe, but if we see another Inflationary jump next month, it may be sooner.

The Big Table of CPI

For those who love details and numbers, I present the Big Table for your perusal:

This is an unsolicited book review of the book: “75 Ways to Save Gas: Clean, Green Tips to Cut Your Fuel Bill” by Jim Davidson of Car$mart published by Penguin Books (ISBN: 978-0-14-317205-5). I borrowed this book from the Ottawa Public Library but it costs $6.25 at the bookstores.

Useful Book

For the price this book is well worth borrowing from the library and even worth purchasing, because while most of us have heard most of the “tips” in this book, it is still worthwhile reviewing them and there are actually a fair number of explanations as to why these tips are important. It is a quick and easy read and I would guess it might be a useful reference book after it has been read (if you purchase it, or if you check the web site).

Lots of very interesting reminders for me that I forget sometimes, but some excellent highlights are:

• Walking is an excellent way to save gas! Sounds like a D’uh! statement, but remember that the next time you drive to the store to pick up a litre of milk.
• Nitrogen in your tires can be better than air, and he explains why, which is impressive (I thought it was just a fad, but there are actual reasons why).
• Drive thrus are not good for your mileage either, which is true, but I never really thought of it that way, but it is a very good point (especially if you are #10 in the Timmy’s drive thru).

Just a few of the entertaining points put forward that I enjoyed being reminded about. The book is well written and I enjoyed it a great deal.

I would say give this book a read if just to remind you that maybe it is time to get your oil changed and get your snow tires off (remember it’s JULY).

Recommendation: A very good read.

In the summertime when all the leaves and trees are green, and the gas prices double, I’ll be blue… OK, that is not how that song goes, but it looks like we are in for another summer of spiking gas prices again. Certainly can’t be blamed on demand this time, since the number of unemployed folk and folks not driving their gas inhaling SUV’s is up and down respectively, wonder what might be causing this? Maybe a secret Canadian Conspiracy to force the U.S. to rely heavily on the Tar Sands in Alberta? Not a bad concept, except this is driving the Canadian Dollar back up to equal value with the U.S. dollar, which will spike the Canadian Economic recovery if we are not careful.

Financial Blog Highlights

This week’s treasure trove of nuggets of wisdom are a wide spectrum of financial discussions:

• One Million and Beyond tackles the argument for the ages about money, Quality of Life and Frugality, can you live without your $5 latte? Yes, I can, but I can’t live without my digital cable, so I am just as guilty, really.
• Million Dollar Journey does a comprehensive comparison in High End Chequing Comparison, a good read for those who might be shopping around for a new bank.
• Michael James’ cynicism shows through in his post A Phone Call From Bell, but he isn’t wrong either. I’m sure if he asked the young lady to repeat “Peter Piper Picked a Peck of Pickled Peppers” five times fast, and he’d agree to the deal, she might do it.
• The Canadian Capitalist tackles a topic near and dear to my heart in Tips on Safety Deposit Boxes. One thing he missed that you shouldn’t put in your safety deposit box, your spare dentures or eye glasses.
• Preet’s attempt at Television fame at Where Does All My Money Go continues on with Watch Me Compete on the W Network, he is entertaining to drink with, let’s hope it translates well to TV.
• Larry MacDonald discusses the Deflation Threat and is skeptical about hyper-inflation and deflation as well. I like reading cynics, makes me feel safer.
• The Canadian Tax Resource writes about Job Loss and Your Retirement Pension Options, interesting ideas, if you have the money or pension.

Don’t miss my weekend post on the one sure fire way to make some coin!

Just in time for your vacation, Gasoline at $1 per litre is coming to a gas station near you.  What is causing this return to last summer’s prices? No real reason, no huge jump in demand, or huge drop in supply, simply prices wandering their way back up.  If anyone can explain to me why this price increase is happening, I’d be glad to hear it, but for now it seems like Gas companies are looking to fortify their incomes for the summer.

Surely Oil prices must be going up?

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Certainly don’t see anything in that graph that suggests why prices are creeping up, guess the price of Oil doesn’t have much reflection on the price of Gasoline.

Luckily gas prices don’t affect any other prices, like food or the like.

Retirement = Pension + Part Time Job?

The government announced new CPP rules starting in 2012, where if you “retire” early at 60 you won’t have to quit your job to get your CPP payments, which is interesting. The change also comes with a catch, where normally at 60 your CPP benefits are reduced by about 30% (from what you would receive at 65), however under the new plan this reduction will now be 36% drop, so there is a catch.

This is in reaction to the number of Canadians who do NOT have a pension (other than the CPP), so a step in the right direction, but is it enough?

Oh, and the deficit for this year’s budget is goinig to be MUCH bigger, in case you were curious too (Yikes).

What costs 84 cents in Ottawa 68 km away costs 64 cents a liter and 140 km away costs 76 cents a liters?

1. Milk
2. Beer
3. Gasoline

Given the postings title, the correct answer is of course Gasoline. Yesterday I did a quick run to Cornwall, and my wife told me to wait until I got to Cornwall before I filled up because gas prices were cheaper there. 

Gas was indeed 6 cents a liter cheaper in Cornwall, so I filled up there, however as I drove back to Ottawa the Esso at the bottom of the 416 just before you head towards the bridge across to the U.S. had their gas at 64 cents (maybe 66 cents) a liter! Holy cow! That is an astounding bit of price variance for a 140 km radius that is for sure. 

Reasons for this odd price variance?

1. Price gouging by large oil companies?
2. The free market in full operation?
3. Price fixing?

I have no idea it is (2) for sure because the free market is allowing this to happen although I’d be curious to hear my readers’ opinions on how much they think it is (1) and/or (3) as well.

What other commodity or item can have this much variance in such a small area (aside from “sales” and such)?