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October 27, 2017 10:45 pm

Gasoline Prices Rise in Wake of Fort Mac Fires

Saturday, May 21, 2016 @ 7:00 AM

Prince George, B.C. – Just in time for the Victoria Day long weekend, and perhaps lasting considerably longer, gasoline prices are on the rise locally, nationally and in the U.S. as well.

Currently the lowest price per litre of regular gas in Prince George is 99.9 cents, the highest is $1.09.9.  The B.C. average is $1.14.7, the national average is $1.05.6 and there is an upward trend in prices across the board.

The senior petroleum analyst with GasBuddy, Dan McTeague, tells 250 News “a lot of it has to do with the concern in the U.S. Midwest and obviously in Edmonton, where a good amount of our crude is produced north of Fort McMurray, about the fires there which have yet to be quelled.  And of course risk to production continues to add more costs to wholesale prices for gasoline.”

“Remember at this time of year,” says McTeague “that this is the weekend that begins the official launch of summer but it’s also the official launch of driving season and, as a result, we’re seeing not only an increase in demand in Canada but the United States is breaking all records of gasoline consumption.  So any kind of risk, including the possibility of some refineries not being able to get access to crude to produce gasoline has had a lot to do with driving wholesale prices up.”

“We’ve seen that, even though we have a small refinery right here in Prince George, the fact is that we are price chasers, we follow the market and we’ve seen an overall increase of about 9 cents a litre, even before retail and taxes on gasoline going back just over the past ten days.  So that has had a lot to do with why we’ve seen this slow trickle upwards in gasoline prices, especially right here in the B.C. interior and, of course, in Prince George and pretty much everywhere across western Canada.”

So the question is, will prices continue to rise into the summer or will they level off?  In short, according to McTeague, we’ll have to see what develops.  “Well I think all eyes have to be focussed on what is happening with the fires in Fort McMurray.  Where they appear to be tapering off in terms of concern, the fact that some of the producers, Suncor in particular, had to declare (Thursday) that they were not able to supply all of their contracts at least until June has sent a bit of a scare into the market, especially the relevant market for us for gasoline, the U.S. Midwest market fed by prices for gasoline in Chicago.”

“There’s also two refineries that are down in that region and that’s why we’re still not out of the woods yet and we’re really going to have to wait and take it day by day to see where gas prices will go as a result of concern about supply of crude.  This is an unusual outcome.  No one really concerns themselves too much with crude as the world is awash in it, but having lost a million to a million-and-a-half barrels-a-day means that there is now a real draw, for the third week in a row we’ve seen a draw in potential Canadian supplies of oil actually in the United States.”

McTeague says there are a number of factors involved in where prices are going to go.  “We are still paying about what we paid at this time last year.  Prices could very well go up still on the question of volatility but if oil starts flowing again and pipelines are not disrupted one would expect that those prices could also fall.”

“But there are other factors.  We price all of our gasoline in U.S. terms and we also have to be mindful of the sudden U.S. summer demand picture.  As I said earlier Americans are driving further and farther and they are using a lot more gasoline which means refiners have to run at much higher production rates, and that could mean a continuation of higher prices.  But all of these variables really can only be seen week to week and anybody who makes a long-term prediction might be predictably wrong.”

While higher gasoline prices may cause some Canadians to re-think their summer travel plans McTeague says the same doesn’t really apply to people in the States.  “Americans haven’t seen the kind of increases we’ve seen here, the price has been relatively stable and they pay for all their gasoline in their own U.S.-denominated dollars.  You know this time last year a hundred pennies bought you a U.S. dollar, today it takes a hundred-thirty-one Canadian pennies to buy the same.”

“So we’ve lost a bit of purchasing power and that’s always a factor because it goes up and down based on crude’s value.  So crude is one thing but we’re comparing two markets here and crude may continue to add to the supply over-abundance but gasoline is not the same and there are very different dynamics at play.”


Gas companies gouging us when oil was well over $100 bucks a barrel and they continue to do it today when it’s under $50 it’s the same old BS and tired of the same excuses. This time blaming something we can’t control, Wildfire.

    Price manipulation pure and simple . Good article in the guardian about Exxon and Philips buying up ev tech patents as early as 1960 . They are as evil as can be imagined .

Same could be said of any commodity, including labor itself, whose price changes are supposedly governed by the so-called ‘law’ of supply and demand. If it were not so, then having a strike for higher wages would be completely ineffective in gaining them. For all a strike does is artificially restrict the supply of labor in the face of a continued demand for it.

If you’re selling gasoline, or groceries, lumber, or whatever to the general public you base your price on your costs plus the amount of profit you have to make to be able to continue doing what you’re doing. So you buy a tanker load of gasoline at today’s price expecting to make so many cents per litre profit on it when it sells. But it’s not a ‘one-time’ deal. When that gasoline is nearly all sold you have to buy another tanker load. And if the price of that next tanker load has gone up, remembering that you have to pay for it BEFORE you sell it? Well, there goes a good chunk of your profit, the dough you thought you could take out of your business. It has to be put back in to pay for that next tanker load of gas at that higher price. Do this enough times in a market where prices are continually rising and, unless you can always exponentially increase the price you get from the public to cover your diminishing profit margin, you’re out of business. Who benefits? No one really ‘profited’ ~ they just worked with bigger figures.

    I agree with your last paragraph 100%.

    Awww… those poor, poor, oil companies when oil was $80 – $100 per barrel here are the kinds of PROFITS they were making: “Altogether, the profits of the six companies jumped more than 40% in the second quarter to $51.5 billion, the first time big Western oil companies have ever reached that level.”

    Do you know how many millions per year their CEO’s make? Sorry… no sympathy here!!!

    ht tp://abcnews.go.com/Business/story?id=5503955&page=1

    That theory doesn’t work when you have a monopoly. In the gas/diesel business we have no choice when they all raise and lower prices in lockstep. The price has nothing to do with anything other than how much profit they would like to make. In reality they could all raise the price to $5/L and as a captive market we have no choice but to pay it, or buy a horse.

      Why don’t they do that then?

Were the real rip comes is when they sell gas to a station at a set price for that load 50,000, 100,000 L,so gas is 95 cent a L,its in the station tank and Esso decides to raise the price to 109 L, fine but the gas in the tanks until refilled should be at the 95 cents that’s the rip.

    So you feel that the station should advance the money.

    They buy low, they sell low.

    Then when the price goes up, they buy high and sell high.

    In the meantime, they have to borrow money in order to buy at the higher price. So their cost of doing business goes up which will raise the price even more.

it is the excuse they are useing, every holiday the price goes up, why you ask, they say if they didn’t the pumps would run out of gas…I say what?

So the Americans are at an all time high for gasoline usage, and us pathetic Canadians are supposed to feel good about carbon taxes? How about our politicians demand a level playing field with the rest of North America.

How quickly we forget that, as it states near the end of the article. The Canadian dollar has gone in a nose dive over the last year and a half to 2 years. In the last month it was centimetering back up to 80 cents to the US$. In the last week it has gone back down to around 75 cents.

If it was on par as it was a couple of years ago, the current price of $1.029 at Costco would be $0.729. At Costco in Bellingham it is US$2.33/USgallon which is US$0.616/litre. That is just over 15% less expensive than in PG. That difference will continue as long as there is the gasoline tax differential between the US and Canada. That is the reason for the price difference.

It was that way long before the introduction of the carbon tax north of the border.

American retailers close to the Canadian border just south of GVRD are hurting badly enough that many are offering to accept the C$ on par for the long weekends until the fall. In the eastern USA similar efforts are being put in place to draw Canadians back. In Washington State, retail is down about 15% over previous years during a time when the general economy in the state has been improving.

    Okay, sorry, bad suggestion to counter blind rage with the logic of the exchange rate with the US$ having a significant impact.

    I love conspiracy theorists. They are wrong 9 times out of 10.

Don’t worry The Leap Manifesto Brainiacs are going to power the planet with David Suzuki’s farts.
And at the time of our provincial election next year, please, please don’t forget that provincial NDP members are automatically federal NDP members.
You curmudgeons complain about $1.10 gas. With the NDP braintrust in government provincially or federally you can expect $5.00 gas because there won’t be a single pipeline in this country. Crude oil will be brought in by blimp, filled with, of course, David Suzuki’s farts.

    But…but, the NDP next door want pipelines. Are they some kind of orange exception to your rule ?

      The communists next door campaigned on the promise of cancelling pipelines and raising energy royalties through the roof. The electorate bought it because they wanted ‘change’. The communists looked at the books and, to their credit, realized that the Alberta economy is built around the energy sector (duh). The electorate woke up from their bender and realized that they had parked the car on the front lawn and slept with the fat ugly lady that works at the pub.

      The NDP (provincially and federally) are all about opposing every kind of industrial economic investment coast to coast to coast and dreaming up ways to spend your money on ‘free’ child-care, social entitlements and unicorn hugs. They can never be allowed the keys to the provincial government bus again.

      “…the NDP next door want pipelines”

      Yes! It is amazing what kind of an effect reality therapy can have on previously avowed principles. The bad corporations in reality are – when they operate profitably – the source of major
      taxes and wages for the employed hourlies. When they do not do well the stuff hits the fan and pipe dreams ( no pun intended) become the victims of plain ordinary reality.

      Actually that reality has been accepted globally for a long time as witnessed by the fierce global competition for corporate investments in order to provide jobs and taxes.

    pipelines are needed to export primarily bitumen to the coasts or across the border to the USA.

    If it stays here, it will be sold at the cheaper continental rate and we will refine it in Canada.

    So why would the price hit $5/litre?

The news media plays the biggest part in why fuel prices are on the rise. They want to get softened up before they get you to bend over.

Vor—-and you are now dealing with one of the most corrupt government that we have ever had in this province and you are willing to to give the keys back for more corruption. Time to wake up and let someone else look at the books and I don’t care what party. We all know now why Christy is smiling so much.

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