Canada’s best-known gas guru says motorists should prepare for a wild, and possibly expensive, year.
Dan McTeague, a senior petroleum analyst with GasBuddy.com, had a busy Wednesday, answering scores of media calls regarding falling gas prices. His day included taking calls from Global News, asking why the South Okanagan has some of the lowest prices in British Columbia.
As of 3 p.m., the province’s lowest gas price on GasBuddy.com was 99.4 cents a litre in Fernie. Overall, with its close proximity to Alberta, where gas is even cheaper (86.9 cents a litre in Calgary), Fernie had three of the four lowest prices in B.C.
In the Okanagan, gas prices are normally higher than other Interior communities, such as Prince George (99.9 cents) or Kamloops ($1.039). Yet this week, stations in the South Okanagan towns of Oliver and Osoyoos had the sixth through 10th cheapest prices, ranging from $1.045 to $1.049.
For comparison, Kelowna and Vernon were mostly sitting at $1.179, while Penticton was $1.139.
In the Lower Mainland, prices varied: $1.249 in North Vancouver, $1.269 in Surrey and Vancouver, $1.309 in New Westminster and $1.299 in Chilliwack.
In Victoria, the cheapest listed price was $1.349, while it was $1.279 in Nanaimo.
On the Sunshine Coast, gas was $1.399 in Gibsons and Powell River.
On Haida Gwaii, one station in Masset was reporting prices of $1.62, down from $1.77.
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“It has to do with what I think can best be described in two words: gas war,” McTeague said in regards to cheap pump prices in Oliver and Osoyoos. “It’s costing most gas stations today, in the South Okanagan, at least $1.01, maybe $1.02, to buy your fuel. Now sometimes you get a penny or two discount because you sell more gasoline or you have a generous provider. But anything under a $1.00, you’re really losing your shirt.
“Not only that, you’re not able to cover the cost of honouring credit cards, which is two or three cents a litre in some instances. You can’t pay for the electricity to operate those gas pumps and you can’t pay your staff overhead or even yourself, unless you’re selling a lot of beef jerky. You’re not making any money in markets where we’re seeing too-good-to-be-true prices.
“I saw a lot of 91 (cents a litre), 93s, 94s. They’re taking a beating. It is definitely a gas war.”
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“I define a gas war as selling gasoline below cost,” McTeague said. “But it’s also when behaviour is sustained in a given community where no one is prepared to really throw in the towel, no one is prepared to blink. And, of course, prices remain very low, to the benefit of consumers who are laughing all the way to the bank. More money in their jeans.”
Gas war aside, McTeague says gas prices are likely to rise — at some point in the year.
“This is going to be a year unlike many, where you’re going to see prices fall and prices rise, often within the same couple of days, by four or five cents a litre,” said McTeague. “And it has nothing to do with what I call retail gas-bar shenanigans. It will have a lot to do with the price of oil and gasoline as it fluctuates dramatically on the markets.
“There’s a lot of moving parts external to Canada, things like the conclusion of whether or not there will be a trade war between the United States and China, an orderly Brexit, factors in terms of supply and demand, geopolitical issues, meteorological issues, hurricanes, even domestically. A weak Canadian dollar, because, of course, we are not selling our oil into international markets.
“We fail to get international prices for our commodities. It means a weaker Canadian dollar, which means more cost at the pumps. So these are factors that will lead to rather significant peaks and valleys in terms for prices. It’s going to be very confusing for people, but, at the end of the day, it’s likely to see higher prices in 2019 than what we saw in 2018.
“And, of course, we can always count on governments to add a penny or two here. In the case of British Columbia, April 1, another $5.00-a-ton carbon tax, which works out to about 1.1 or 1.2 cents a litre.
“So all indications are that unless we slip into a global recession, gas prices are likely higher in 2019, so brace yourself for a very wild and a very bumpy ride at the pumps.”