Central Alberta drivers benefiting from gas price war

Click to play video: 'Drivers in Red Deer reap rewards of gas war, expert says'
Drivers in Red Deer reap rewards of gas war, expert says
WATCH: On Friday, some gas stations in Red Deer, Alta., could be found selling gas as low as 118.9 cents a litre. As Tracy Nagai reports, one gas analyst says the plummet at the pumps isn’t expected to last for too long – Sep 16, 2022

Drivers in Red Deer, Alta., are currently the envy of the province.

While prices in Calgary and Edmonton continue to hover close to $1.40 per litre, some stations in the central Alberta city are selling gas for as low as $1.16.

“You guys are getting ripped,” Red Deer resident Jim Boyd said as he filled up his truck Friday morning.

But Boyd thinks gas prices are still way too high.

“I think it’s ridiculous still. I could fill up this tank and it cost me $87. Now it’s costing me $127 and I had a quarter of a tank in it.”

Dan McTeague, president of Canadians for Affordable Energy, says the low price is the result of a rock ‘em, sock ‘em gas war.

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And McTeague says it’s clear who the losers in this battle are.

“It costs gas stations between $1.22 and $1.28 to buy their fuel right across the province,” he said.

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“These are really big losses. We’re talking 10 to 15 cents a litre by 20,000 litres a day. You can now see the proposition of losing $4,000 to $5,000 a day isn’t very economical, and a lot of these companies could find themselves in very dire financial straits if they continue much longer.”

McTeague expects this to be a short-lived phenomenon and doesn’t think the same will happen in the bigger cities.

“We’ll see how long it lasts. It’s a good thing for the consumers, but it’s not the real world… when you consider the wholesale cost of replacement being between $1.22 and $1.29. It’s impossible for them to continue,” he said.

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“A lot of those gas stations may have what’s called dealer support, so the supplier is just saying, ‘Listen, match the other person across the street for now, we’ll get over this one way or another.’ But all of them, I’m pretty sure, want to throw in the towel because it’s a zero-sum game and you can’t sell enough beef jerky to make up the difference.”

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McTeague adds fuel demand remains high and he doesn’t see that dwindling any time soon.

“I think we’re heading into a very expensive winter, especially with diesel – home heating, natural gas, propane and ultimately gasoline prices.”

— With files from Tracy Nagai, Global News

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