LATEST

CHARBONNEAU – Will Canadians pay more for gas to support Ukraine?

(Image: Mel Rothenburger)

HOW DEEP is our support for Ukraine? Are Canadians willing to pay even more for gasoline at the pumps or is it all talk?

Germany has made its choice clear. They will pay much more for natural gas by refusing certification of the Nord Stream 2 gas line from Russia.

It’s a sacrifice that Germans are willing to make. Germany’s Foreign Minister said: “For us as the German government, it was important to show that for a free and democratic Ukraine, we are willing also to accept consequences for our national economy. Peace and freedom in Europe don’t have a price tag.”

As of now, Canadian support is tepid. In a recent poll by the Angus Reid Institute, the pollster characterizes Canadian’s support for Ukraine as being at an “arm’s length.”

Two thirds of respondents to the poll said they would be willing to send humanitarian aid (medicine, food, medical personnel) but only 13 per cent would see Canadian troops fighting alongside Ukrainians.

A disappointing 20 per cent want nothing to do with the invasion; they want to stay out of it completely. They have obviously forgotten how quickly a megalomaniac’s conquests can come close to home.

Now, as in the beginning of the Second World War, the conflict is seen as “over there.” Older Canadians understand how toxic that attitude can be as Hitler marched into country after to country.

Russia’s invasion of Ukraine sent oil prices above US$100 a barrel for the first time in almost eight years.

Russia produces around 17 per cent of the world’s oil, and 13 per cent of its natural gas.

Oil was already in short supply before the invasion as we recovered from the pandemic-induced slowdowns. Rising oil prices have fueled inflation to multi-decade highs.

That’s a far cry from the early COVID-19 lockdowns in March and April of 2020. As cars and planes were parked, demand for fuel plummeted. At one point, West Texas Intermediate oil futures went negative.

With inventories tight, oil and gas sanctions of 4.3 million barrels a day from the third-largest producing country would exact a toll on everyone. But the toll of doing nothing to stop naked aggression would be greater.

Oil and gas exports account for nearly 60 per cent of Russian exports, so pinching off energy shipments would inflict the more damage to Russia than the West.

If Canada supported sanctions against Russian oil, inflation will increase: everything will cost more. Every US$10 increase in oil prices pushes up inflation by around 0.4 percentage points according to Bank of Montreal economists.

Canada has cut off Russian oil but that’s largely symbolic because imports from Russia only amount to 2.5 per cent of our total imports.

What will hurt the Russian warmongers the most is if all global supplies from Russia are cut off. Regrettably that will push the cost of gasoline even higher.

On the positive side, it would help wean us away from fossil fuels.

Canadians are willing to show support for Ukraine but how deep is that support for our fellow Canadians – Canada has the largest number of citizens of Ukrainian origin in the world, outside Russia.

Would support include a hit to the pocketbook or are we just talk?

David Charbonneau is a retired TRU electronics instructor who hosts a blog at http://www.eyeviewkamloops.wordpress.com.

About Mel Rothenburger (9238 Articles)
ArmchairMayor.ca is a forum about Kamloops and the world. It has more than one million views. Mel Rothenburger is the former Editor of The Daily News in Kamloops, B.C. (retiring in 2012), and past mayor of Kamloops (1999-2005). At ArmchairMayor.ca he is the publisher, editor, news editor, city editor, reporter, webmaster, and just about anything else you can think of. He is grateful for the contributions of several local columnists. This blog doesn't require a subscription but gratefully accepts donations to help defray costs.

2 Comments on CHARBONNEAU – Will Canadians pay more for gas to support Ukraine?

  1. “Will Canadians pay more for gas to support Ukraine?”
    As clickbaity as that is … its an odd question to ask.

    Canadian fuel prices at home are based directly on the world market price, and since we only actually use 2 odd % of Russian oil products, that means that whether or not we support Ukraine … our price at the pump will go up.

    We are not in a position like Germany who use a huge amount of energy products from Russia, especially natural gas, so we will never be in a position to ‘support Ukraine’ from the perspective of turning off taps … and we never will be, simply because we dont use their products.

    Aligning Canada’s direct support to Ukraine (from the angle of fuel) as being anywhere like that which is being done by Germany, minimises just how harrying this decision is for Germany. Household heating bills will shoot up for all Germans because of this. We just suffer the same global fuel price bump that the rest of the world does. Not the same category.

  2. I just can’t follow the logic in this latest op-piece from DC. But one thing is clear, Ukraine notwithstanding…there sure is a LOT of “talk” going around.

    Economies around the world need oil and its derivatives for the simplest of reasons, oil and its derivatives are at the centre of economic activities all around the world. And economic activities allow people to work and make money …basically allowing them (the people) to do what’s important to them, which is to play and enjoy. In a nutshell, selfishness wins.

    The oil business is a huge cartel and the prices we pay at the pump is only partially influenced by supplies. Over the years it has been found that speculative and opportunistic practices have also quite an influence on oil prices. War is always a very good pretext for a price increase.

    It is up to each individual nation to implement an embargo on oil and gas from Russia. We have done our part in that regard. I personally would donate money to Ukraine but only to charitable entities with a good reputation. I don’t want my money to be wasted in an overburden of bureaucracy or siphoned off for other purposes.

Leave a Reply to David Cancel reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: