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July 08, 2021 - 6:00 PM
Despite gas prices being expected to drop in the Thompson and Okanagan regions over the next few days because of a drop in crude oil prices, stations in Kelowna have gone in the opposite direction.
Yesterday, July 7, most gas stations in the Thompson and Okanagan regions, including Kelowna, were in the $1.40.9 to $1.43.9 range. A few Kelowna stations were showing on Gasbuddy.com as charging $1.55.9.
Today, July 8, almost all of the 50 or so gas stations in the Central Okanagan were charging $1.55.9 cents a litre for regular gas.
READ MORE: Gas prices on way down in Kamloops and Okanagan, but not for long
Other cities in the region did not change their prices.
“It only happens in Kelowna,” Dan McTeague, president of Canadians for Affordable Energy, told iNFOnews.ca today. “They don’t do it in Kamloops. The don’t do it in neighbouring towns. They’ve been doing it for years.”
He suspects its because Kelowna is such a tourist town and noted such increase over the years often happened in the summer.
“It looks like gas station there have a lot more power to drive up prices and leave them there,” McTeague said.
Even though the $1.40.9 to $1.43.9 per litre range seems quite high, at that price retailers are only making two to four cents profit per litre, compared to a normal profit margin of seven to 12 cents.
The change in Kelowna, accompanied by a one cent per litre drop in the base price, means local stations are now making 20 cents a litre in profit, McTeague said.
“It’s well beyond acceptable,” he said. “If you can’t operate on four cents per litre, keep the price up. Keep it (profit margin) at nine, 10 or 11 cents. Stop this nonsense. It makes guys like me turn around and call them off side.”
When told that Costco hopes to open its new Kelowna outlet by the end of the year and that it will have 24 gas pumps, McTeague suspects this might be the last such giant increase in prices.
READ MORE: Kelowna to get 24-pump gas bar with new Costco
“In cities where Costco opens up gas stations, retail margins suddenly plummet,” he said. "They’re tempting the goat. This may be their last kick at the can so get it while it’s good. They won’t be pulling this kind of behaviour once Costco is in town."
Because of its volume, Costco is able to buy gas at three to four cents a litre below the rack price that other gas retailers pay. They only take Costco credit cards at their pumps and keep their profit margins low or sell it at cost, he said. That forces other retailers in the same market to keep their prices, at least, close.
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