CAA says not to boycott the oil companies...

In a recent article on CBC the Manitoba branch of the Canadian Automobile Association (CAA) has suggested that boycotting a specific oil company "just hurts the station owners and staff, not the oil company itself".

Jeannie Dalman, spokesperson for CAA Manitoba, suggests directing concerns at local MLAs and MPs as "both of them are involved in gasoline prices in terms of taxation" is preferred.  (Presumably, as spokesperson for CAA Manitoba this is their "official position" on the problem of soaring gas prices).

My question is this:  Given our record-level gas prices in recent weeks, how much of that is a result of increased taxes?  How much is attributed to rising oil prices?  The answer (as far as I can tell) is that neither correlate with the gasoline prices at the pump that we are experiencing especially in the West (B.C. has the highest gasoline prices in Canada).

The Economics.  Assuming my local MLA or MP is able to lobby for lower taxes (which is a stretch at best), the government would be in fact creating an "enabling subsidy" that contributes to oil companies and their perceived gouging.  But is it in fact gouging?  Our "free market", even for a highly elastic commodity like gasoline, has established that prices in excess of $1.30 per liter is a fair value.  Consumers in Canada (and presumably in the U.S.) seem reasonably prepared to purchase gas at levels significantly equivalent to historic demand levels.  If the market is prepared to pay that at the pump, your average consumer doesn't know, much less care how much (as a percentage) of that fee is going to taxes vs. oil company revenue.

Gasoline Tax as a Social User Tax.  My position ironically is that government could actually raise taxes on gasoline, earmarking the revenue for infrastructure development and environmental sustainability.  A sort of "user tax" (not unlike a "sin tax") that targets the primary users of our infrastructure and significant (though not principal) contributors to environmental and air quality.  Though we (in both Canada and the U.S.) complain bitterly at the pump, our prices remain some of the lowest in the world.

Consumer Behaviour.  Even at today's prices I'm not seeing first hand any changes in behaviour such as marked increase in public transit (though the Globe and Mail suggests otherwise).  My personal observation is that there are just as many SUVs on the road now as there ever have been, and daily commute time doesn't seem any less when I do drive to work than before (indicating the same number of cars on the road, no?).

Am I wrong?

(Photo by Cobalt123 via Flickr)