Independents hardest hit by Manitoba gas pipeline shutdown By: Chris Kitching Posted: 5:22 PM CDT Tuesday, Mar. 26, 2024 Last Modified: 9:27 PM CDT Tuesday, Mar. 26, 2024 Updates

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Some independent gas stations in Winnipeg continue to feel the pinch more than a week after a pipeline had to shut down for repairs, while analysts expect pump prices to rise over the coming days.

A Canco station on Isabel Street, just south of Logan Avenue, was out of gas Tuesday morning. Digital signs that normally display prices were blank.

“We are expecting delivery soon. Sorry for the inconvenience,” read a note attached to a pump at the inner-city station, which usually sells gas at prices lower than major retailers.

Driver Greg Aguilar was disappointed when he pulled up in his pickup truck and saw the note.

“I like to get gas here because it’s cheaper,” he said, noting it usually costs him about $120 to fill his tank.

Just over the Salter Street Bridge in the North End, a 204 Fuels station was out of premium gas, an employee confirmed.

Drivers were lined up for regular gas, which was priced at 133.9 cents per litre — six cents less than most stations.

For most stations, there was no disruption Tuesday.

Analysts said some stations are still adjusting to new temporary supply chains set up in the wake of Imperial Oil’s unplanned pipeline repairs.

“There is a disruption in the system. They will be resupplied sooner or later,” said Dan McTeague, president of Canadians for Affordable Energy.

Employees of two independent chains told the Free Press fuel deliveries were not arriving as quickly as they did before the shutdown.

In normal times, fuel is usually delivered to a station within 24 hours of notification, said McTeague.

Staff at two independent stations said the shutdown has led to days-long waits.

Kelowna, B.C.-based Canco did not respond to a request for comment. A manager of locally owned 204 Fuels declined to comment.

Imperial Oil announced March 17 it was shutting down a pipeline, located between Gretna and Winnipeg, for maintenance work that could last three months. Crews will replace a section of pipe that runs under the Red River near St. Adolphe.

The pipeline supplies gasoline, diesel and jet fuel to Winnipeg and surrounding communities. Fuel will be transported via train and truck in the interim.

Edmonton-based spokeswoman Keri Scobie said preparatory work continued Tuesday.

“Equipment is starting to arrive this week, and we’re preparing to start the maintenance via horizontal directional drilling later in April to minimize impacts,” she wrote in an email.

Scobie said Imperial Oil is providing wholesalers with the supply they need for their customers.

If a station runs out of fuel, it could be due to “allocation,” or not receiving full deliveries like it used to, said McTeague, who runs Gaswizard.ca, a price prediction website.

Discounters tend to go through gasoline faster because of demand for lower prices, he said.

A station’s bottom line is affected when it runs out of fuel and has to wait for a delivery, McTeague noted.

 

Independent stations typically buy gas on the spot market, which involves immediate delivery, rather than a contractual basis like branded retailers, said Roger McKnight, chief petroleum analyst for Oshawa, Ont.-based En-Pro International.

“They’re getting it wherever they can,” he said.

In a bulletin, the Manitoba government said the amount of gas, diesel and aviation fuel in the province has actually increased since work on the pipeline began.

“Supplies are being maintained by industry with ongoing rail and truck fuel deliveries,” said the statement.

Provincial officials meet regularly with suppliers and track levels, prices and distribution to retailers.

It said work to upgrade offloading capacity at fuel terminals in Winnipeg is underway and has been completed at Gretna.

Premier Wab Kinew last week called on companies to ensure fuel is distributed “equitably” across Manitoba during the shutdown.

The federal Competition Bureau has said it will investigate if it finds evidence of price fixing, supply restriction, market allocation or any other anti-competitive behaviour in the gasoline market.

Kinew has said 50,000 barrels per day are arriving by train and truck.

The government has assured Manitobans there are no significant concerns about supply.

Analysts have described the shutdown as an “inconvenience” more than anything, while assuring the public there is no need to panic buy or hoard fuel.

“Equipment is starting to arrive this week, and we’re preparing to start the maintenance via horizontal directional drilling later in April to minimize impacts.”–Spokeswoman Keri Scobie

Meanwhile, analysts were divided over whether the shutdown could lead to a spike in prices in the short term.

McKnight expected gas pump prices to rise by about three cents a litre Wednesday.

The April 1 federal carbon tax hike is expected to add about three cents per litre of gas, he and McTeague said.

Kinew hasn’t confirmed whether his government will extend the provincial gas-tax holiday beyond July 1.

The 14-cent per litre tax was temporarily lifted Jan. 1.

chris.kitching@freepress.mb.ca