The announcement of the cut in excise taxes on diesel and jet fuel will cost the Federal treasury $1 billion dollars.
The actual difference at the pumps for diesel will be 2 cents per litre. So if the price of diesel is $1.20/L then the price will come down to $1.18/L. How long does anybody believe the price would stay at its newly reduced level for long? Big Oil would back-fill that reduction in a heartbeat and take that money for themselves.
The actual difference in price for jet fuel is about the same as diesel. So we could expect Big Oil to do the same. Although, they might decide to give the airlines a break and not raise the price but I would bet large sums of money that those airlines would not pass on any saving, instead using the reduction to shore up their rather messy balance sheets. Of course, I would not expect Big Oil to give anybody a break so they would reap the full benefit as well.
So, there you have it. The average consumer will not save a penny as a result of these tax cuts and Big Oil will reap a $1 Billion dollar windfall.
It is nice that you are looking out for your buddies in the Oil Industry there Mr. Harper.
1 comment:
It would seem that you are one of the few bloggers that have picked up on this. I don't know if you have read this but try this site.
http://www.progressive-economics.ca/2008/09/09/diesel-and-dust/
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