Gasoline Prices Are Up, and Going Higher
Prince George, B.C. – The price of gasoline has jumped up in recent days and there is every indication we can expect another bump leading up to the Easter weekend.
Costco on Range Road has been selling its regular gas in the mid-90 cent range in recent weeks but that has shot up to the current price of $1.04.9. Most other dealers in the city are charging $1.07.9. The BC average is $1.26.6 per litre, Vancouver’s low price is $1.30.9, Kelowna $1.19.8 and the national average sits at $1.11.5.
Regarding the price increase Dan McTeague, Senior Petroleum Analyst with GasBuddy, says “we’ve seen a pretty steep increase on the wholesale price for gasoline out of the relevant U.S. market, the Chicago stock market. All of western Canada with the exception of the lower mainland and Vancouver Island are influenced by the health and output of U.S. refineries.”
“We’ve been price-takers in Canada now since 1984 with the shutdown of the National Energy Program. So, ever since then we’ve paid for our prices in U.S. terms, always following the American market and for our region, everything from the BC coast all the way to Thunder Bay, Ontario, what happens in the United States matters.”
McTeague says “we’ve seen about a 20-cent-a-gallon increase, good enough for about a 5 or 6-cent-a-litre hike. And that really means that, if I’m a gas station owner, even though I have a small refinery in the back yard here in Prince George, it still costs me about $1.04 to buy my gasoline, that’s wholesale price.”
“So if you’re seeing a $1.04.9, they’re selling without a margin to operate or, more importantly, even at $1.07, when you accept credit cards which charge 2 sometimes 3-cents a litre, you’re not making much to turn on your pumps unless you have a generous bank, a decent wholesaler who’s prepared to spot you money during taking a loss or you have a rich uncle.”
“In any scenario what it really means is that likely by mid-week and yes, before the holiday weekend for Easter you’re likely to see a bump on the price of gasoline to perhaps as high as a dollar-10, dollar-14. If it doesn’t happen it just means that you’re really benefitting from a gas price war, because they can’t continue to sell at a loss.”
The question then is, will that bump just be temporary or will it be prolonged? McTeague says “well two things happen next week, not just the holiday but we also move to what’s called the Summer Specification gasoline, which means it does cost another couple of pennies for refiners to produce the quality of gasoline that doesn’t evaporate under higher temperatures, and that’s a national mandate from coast to coast in Canada. It starts April 15th and means that all gasoline must have a certain RVP (Reid Vapour Pressure) mandate. Your gasoline has to be more resistant to higher temperatures as we hit the summer months. That stays in effect until September 15th and will mean higher prices at the pump.”
McTeague says RVP “really is a real thing, it’s not something that’s made up or used as an excuse.”
His advice to motorists? “If you’re thinking you need to pick some gas up before Easter, don’t just think about it, do it.”