If you drive a car and live in one of Alberta’s two largest cities, you may have noticed this week that depending on the gas station, you could be seeing radically different prices for fuel — sometimes differing by up to 20 cents per litre.
“It has a lot to do with what I referred to many, many years ago — and I actually hashtagged it #gasbarshenanigans,” Dan McTeague, the president of Canadians for Affordable Energy and the man behind the website gaswizard.ca, told Global News on Wednesday.
“Gas stations today, to buy their fuel, with a wholesale price here in Edmonton of about 96 or 97 cents a litre, when you add all the taxes — federal, provincial, carbon taxes, and then you throw in the GST — you’re looking at about $1.43 (per lite) or $1.44 (per litre) to replace the fuel you’re selling.
“So if you’re selling for $1.50 or $1.52, … you’re making seven to eight cents as a retail margin, that allows you to cover the cost of operating your gas station. It allows you to honour credit cards which sometimes come at one or two or three per cent of the actual costs. … But if you’re selling at $1.30, you had better have a very generous uncle or some kind of other strategy, you’re selling gasoline at 13 or 14 cents a litre below cost.”
A Global News crew drove past a gas station in central Edmonton selling gas for $1.34 per litre on Wednesday and its pumps saw lengthy lineups.
McTeague said he does not believe refineries will sell gas stations gasoline for less than what it costs them to produce it.
“Unless you have some kind of model that allows you to push greater volumes, to get down to $1.32 or $1.34 requires the sale of perhaps a lot of other products in your store — a lot of beef jerky,” he said.
“I don’t know what their margin is on these things, but you’d better have a lot of people coming to your store as a grocery store rather than as a retail gasoline outlet because you’re not going to be making any money.”
McTeague noted that while both Calgary and Edmonton are seeing major ranges in price per litre, Calgary continues to have more expensive fuel for consumers, about two or three cents per litre more than for Edmonton consumers.
“It’s the cost of transportation — pipeline — from the refineries,” McTeague said. “Either way, prices that we’re seeing right now are very indicative of what we’re seeing on markets pretty much across most of the U.S. Midwest and across Western Canada.
“If you’re getting gasoline in Calgary for under $1.52, you’re doing very well. And if you’re in Edmonton, buying for under $1.50, you’re the one that’s in the lead, not the gas station. So take advantage of it while you can. Things like this don’t always happen, and they certainly don’t always last.”