Winnipeg Free Press - PRINT EDITION

Holiday pump jump debated

Industry analyst blames refinery woes, demand for gas pains

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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, a website that monitors gas prices in cities across the country.

"We're seeing gas prices going up across the country," 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."

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


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

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