Mr Westgate

Dear Mr Westgate;

Murray, I hope you are still around at the Imperial Oil office. Yours is the only trustworthy face I would recognize with a big oil company and I need to talk to some one important. I guess your company is now Esso and like so many others I remember, the names have changed over the years. Funny, isn’t it, but there was just something reassuring about the name Imperial Oil that Esso doesn’t have. I guess you would remember FINA – Finest In North America; Supertest – swallowed up by some company like BP which used to be British Petroleum; there was White Rose which I think Royal Dutch Shell bought out and then changed the name to just Shell; American Oil Company changed to plain Amoco but I think they’re gone too. Anyway, I digress, but I sure remember you on Hockey Night in Canada shilling gas with a tiger tail in the tank!

What I wanted to ask you to do was to talk to the bean counters at Esso to try to get them to apply some consistent accounting practises to their gasoline. It seems to me that they take all their costs of refining crude into gasoline and mix those costs together to come out with an average cost per litre (used to be gallons, Murray). It doesn’t matter if they get their oil from Klein in Alberta, Dick Cheney in Pennsylvania or the House of Saud over there in the Middle East; all the costs are averaged out with the capital costs of those old refineries that they have written off several times over. Then they add in the cost of your advertising salary, insurance, executives’ lunches and things like that.

The bean counters then divide all those costs by the number of litres of gas they load into those big tanker trucks, add a few cents for profit and have their selling price for the gasoline. But it seems that is where they stop averaging out the costs, because we are told the cost of delivery is then added to the gas price depending on how far they have to truck the liquid gold. For instance, if the truck drives to downtown Toronto it might cost one cent a litre, but if the truck comes up to northern Ontario, it can cost ten or fifteen cents a litre, depending on whether the truck stops in North Bay, Timmins or Sudbury. If the struck stops in Powassan or continues on to Sturgeon Falls, somehow the cost is a whole lot less than in North Bay and I can not figure that out.

What I would like you to ask them to do is to take all these delivery costs and add them into the cost of the product before they load those tankers. The way I figure it, Murray, is that because most of the gas is sold down to the Toronto area, the average cost of shipping would be something like two or three cents. Since we are all fellow citizens and like to be treated equally, this would seem like a fair thing to me. And it would sure make us who live in the hinterlands very happy. Those people down south won’t notice anything if you add the couple of cents a litre on a long weekend, like you usually do. Thanksgiving weekend would be an appropriate time.

The other thing, and I’m going to send a copy of this letter to Dalton and Martin, is that when they add on the GST, we are paying more tax than our fair share for our gasoline. We are paying on the pump price which includes all that shipping cost. So we in the north are paying more into the GST pot and the folks down south are getting more out of the pot because they have all those buses and underground trains that need fixing. Those folk living out in East Ferris, Bonfield and Chisholm are sure getting it in the ear because they don’t have any buses, but then I guess they are getting used to the way the government helps them.

I don’t want Mr Martin to worry about losing revenue because he will end up getting the same amount of tax – he will be just getting it equally from all the consumers. At least the Dalton Gang puts their tax on a per litre basis, which although it is too much, seems more equitable than what the crooks – sorry – politicians in Ottawa are doing to us. And Dalton needs to talk to Martin about some equity matters anyway.

The good thing for your company Murray is that when they do this, they will sell a whole lot more gasoline than your competitors. I know it will catch them by surprise because we’ve been told time and time again that the oil companies don’t price fix and hardly ever talk to each other except over $100.00 Cuban cigars outside the foyers on Bay Street. Can you just imagine the havoc it will create here in the north when Esso drops its price by fifteen cents a litre and the guy down the street can’t figure out what to do when his head office tells him they don’t know how Esso can do this!

Anyway, thanks Murray, or if you are not there, thanks to whoever gets this letter. What seems like a small change in your bookkeeping will mean a whole lot to us up here in the north.