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Image Credit: UNSPLASH/Sippakorn Yamkashikam
August 23, 2021 - 5:30 PM
Gas prices at most Kamloops and Kelowna stations have dropped by two cents a litre to $1.50.9 in Kamloops and $1.52.9 in Kelowna.
The price that gas stations are paying for gasoline has dropped a full 10 cents per litre since Aug. 3.
“It’s costing gas stations just under $1.30 to buy their fuel,” Dan McTeague, president of Canadians for Affordable Energy, told iNFOnews.ca Monday, Aug. 23. “Those are 21 cent a litre margins. Identical to Calgary. Identical to Edmonton. Identical to Winnipeg. What’s happening is, across much of Western Canada – the area served by the three refineries in Edmonton and one in Regina – is that they’re all holding the same generous, almost unprecedented retail profits.”
Normally, a healthy profit is considered 10 to 12 cents a litre, McTeague said.
READ MORE: Kelowna drivers being gouged with gas price hike: energy analyst
Almost all stations in the Okanagan and Kamloops pay the same “rack” price as Kamloops, although Costco usually gets a three to four cent discount, McTeague said. That fell from 98.5 cent per litre on Aug. 3 to 88.7 on Monday. Adding taxes and fees on top, that means it’s costing the retailers about $1.30 a litre to buy their gas today, McTeague calculated.
Yet, the price at the pump only fell two cents, after jumping to the higher levels in early July.
READ MORE: Price at the pumps jumps to more than $1.55 throughout Thompson-Okanagan
There are a couple of exceptions to these big profit taking stations.
The price in Vernon right now is $1.42.9 to $1.43.9 per litre, according to GasBuddy.com. That means those stations are only making 12 or 13 cents a litre profit.
Costco in Kamloops is selling its gas for $1.39.9 cents a litre and is still making a profit. That’s unusual for Costco, McTeague said, since gas is often sold at cost or below by Costco.
“Maybe Costco is also saying: ‘Why should we beat ourselves up? We can get eight or nine cents a litre here and make people happy because everyone else is dinging drivers for an extra 22 cents,” McTeague said.
Prices in Penticton range from $1.51.9 to $1.55.9 per litre, according to GasBuddy.com.
McTeague expects the rack price to go up by about two cents a litre on Wednesday but cannot predict if that means retailers will add that two cents back into their sale price.
What McTeague does know for sure is that, even at these high prices, gas is priced well below what it should be selling for.
The U.S. has decreased its production while demand has gone up. It has seen a decline in inventories for nine of the last 11 weeks at the same time that OPEC (the Organization of the Petroleum Exporting Countries) is refusing to increase production, he said.
That’s creating an overall global shortage that, at some point, is going to trigger a dramatic increase in prices, McTeague said.
It’s just that, at this time he, nor anyone else, can predict when that jump will happen.
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