Overcast

Winnipeg, MB

23°c Overcast

Full Forecast

Business

Winnipeg Free Press - PRINT EDITION

Holiday pump jump debated

Industry analyst blames refinery woes, demand for gas pains

Posted: 05/16/2013 1:00 AM | Comments: 0

Last Modified: 05/16/2013 8:56 AM | Updates

Advertisement

  • Print

The price of a litre of regular gasoline has jumped to its highest level in two years -- 128.9 cents -- reigniting a heated debate about whether prices are rising because a long weekend is coming up.

Although a number of stations were still selling regular unleaded gas at their old posted price -- anywhere from 118.9 cents to 122.9 cents per litre -- as of Wednesday afternoon, at least 15 others had already boosted their price to 128.9 cents, according to GasBuddy.com, a website that monitors gas prices in cities across the country.

"We're seeing gas prices going up across the country," GasBuddy.com co-owner Jason Toews said in a telephone interview from Regina.

Toews said there was a smaller price hike about a week ago, then a bigger spike beginning Tuesday and spilling over into Wednesday -- three days before the start of the Victoria Day long weekend.

"This comes as no surprise. What day is Monday?" Toews said. "It happens all the time."

However, a senior executive with Kent Marketing Services Ltd., which provides data, analysis and consulting services to the petroleum industry, blamed the latest price increase on production problems at a key Suncor Energy Inc. oil refinery in Edmonton.

Michael Ervin said the production woes, coupled with the usual spike in demand at this time of the year, has taken a big bite out of gas inventories in Western Canada. And that drove up wholesale prices about two weeks ago, and started driving up retail prices in the last couple of days.

"It's happening predominantly right across Western Canada," Ervin said, "and no, it's not timed to the long weekend."

Ervin said a study Kent conducted last year showed retail gas prices don't regularly go up before a long weekend. That's a myth.

A Suncor spokeswoman said a variety of factors determine the retail price of gasoline, with two of the most notable being crude oil prices and changes in wholesale gas prices. She confirmed recent problems at its Edmonton refinery have led to temporary production cutbacks, which in turn led to a fuel shortage in the three Prairie provinces. But the company states on its website it has since obtained additional gas through its supply network, and stations in Manitoba and Saskatchewan should no longer be affected by the shortage.

Toews conceded production woes may be partly to blame for the recent price hikes. But he still maintains the main reason is petroleum companies know travel will be up this weekend, and they want to take full advantage of that.

High school student Harman Bhamrah, who stopped Wednesday afternoon to put $20 worth of gas in his car at a Tempo Gas bar on Inkster Boulevard, said he doesn't know why prices are going up. All he knows is that he doesn't like it.

"It's too expensive," the 19-year-old said. "We shouldn't have to pay this much."

But another motorist at the same gas bar had some very strong opinions about why prices are so high. Dave -- he wouldn't give his last name -- blamed it on the pending long weekend and high fuel taxes.

He said he's so fed up, he's thinking about selling his pickup truck, which now costs about $150 to fill.

"I think its time to get a smaller car."

Sanjiv Kaushal, owner of the Inkster Boulevard Tempo station, said his supplier notified him Tuesday afternoon it was raising the price he pays for gas by seven cents a litre. He said he had no choice to pass on six cents of the increase. He boosted his pump price to 127.9 cents.

"I only get four cents from every litre," he explained. "I try to keep prices down for as long as I can because I can sell more gas. "But I can't pay out of my own pocket, either."

murray.mcneill@freepress.mb.ca

Republished from the Winnipeg Free Press print edition May 16, 2013 B8

History

Updated on Thursday, May 16, 2013 at 8:56 AM CDT: corrects typo

Fact Check

Fact Check

Have you found an error, or know of something we’ve missed in one of our stories? Please use the form below and let us know.

* Required
  • Please post the headline of the story or the title of the video with the error.

  • Please post exactly what was wrong with the story.

  • Please indicate your source for the correct information.

  • Yes

    No

  • This will only be used to contact you if we have a question about your submission, it will not be used to identify you or be published.

  • Cancel

Having problems with the form?

Contact Us Directly
  • Print

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

You can comment on most stories on winnipegfreepress.com. You can also agree or disagree with other comments. All you need to do is be a Winnipeg Free Press print or e-edition subscriber to join the conversation and give your feedback.

Have Your Say

New to commenting? Check out our Frequently Asked Questions.

Have Your Say

Comments are open to Winnipeg Free Press print or e-edition subscribers only. why?

Have Your Say

Comments are open to Winnipeg Free Press Subscribers only. why?

The Winnipeg Free Press does not necessarily endorse any of the views posted. By submitting your comment, you agree to our Terms and Conditions. These terms were revised effective April 16, 2010.