A local investment advisor, author and chartered professional accountant did the math and says that a large part of the increases seen in gasoline prices in recent months is a direct result of changes in the market and the value of the Canadian dollar. .
Larry Short, senior investment adviser at Short Financial, a branch of IA Private Wealth in St. John’s, says that in 2014 gasoline in Newfoundland and Labrador averaged $1.31 a liter, while the price of Brent crude was $98, 97 cents per barrel.
What many people forget, says Short, is that the value of the Canadian dollar was higher than it is now.
In 2014, the Canadian dollar was $1.04 per US dollar. The Canadian dollar is now valued at US$0.77, a difference of about 26 percent.
That translates to a whopping 54 cents difference, and when you compare the price of a barrel of oil today to what it is now, that helps explain another big increase of about 70 cents a liter.
Short points out that if the price of oil remained at US$99 a barrel and if the Canadian dollar remained at $1.04, we would still be paying $1.34 per litre. “So there is not a massive conspiracy that the provincial government is dragging down a huge amount of money to pay the deficit, this is simple math.”