Today’s Poll

Gas prices dropping — but why all the fluctuation?

Nelson Daily Staff
By Nelson Daily Staff
January 27th, 2016

A year ago, Nelsonites were paying under a buck for a regular liter of gas.

But while Nelson drivers wait for that elusive dip below a dollar, owners in the surrounding West Kootenay are cheering prices as much seven cents below the buck mark.

So why the discrepancy in price from say, Centex outside Salmo — 92.9 — to Chevron in downtown Trail and Glade Esso — 95.9 — to Nelson’s current 1.01.9?

Industry analyst Dan McTeague of GasBuddy.com says the reason could be due to the price of “wholesale” gas.

“Wholesale price for gasoline stations through the region, Castlegar, Trail (Nelson) over towards Kimberley and Cranbrook is about 80-81 cents per liter with transportation,” McTeague told The Nelson Daily.

“The difference is retail margin. In smaller communities retailers who have bought gasoline a week or two ago are paying about 10 cent a liter higher . . . so that might account for why (price) is a high as it is.”

GasBuddy.com is a group of local websites which offers an online method for website visitors to post and view recent retail gasoline prices.

A reader to The Nelson Daily took issue with the fact that earlier this week prices in Nelson were as high at some retailers as 1.06.9 while, 30 minutes away, prices were in the mid-90s.

“Anybody who has bought gas at the gas station over the past week has certainly been able to take advantage of the lower wholesale price at 81 or 82 cents, but at a $1.06.9 that a considerably healthy retail margin,” McTeague said.

“And I think it does require motorists to be informed and that’s why it’s 95 cent a liter in Castlegar (and Trail) and why it’s 94 cents in other places as well.”

Last year prices hovered around the $1 mark for January before climbing back up the scale.

However, this year it appears the oversupply of crude on the market may drive prices even lower than the price currently at the pumps.

I don’t think we’ve hit the bottom yet,” said McTeague.

“The market is oversupplied with crude, and now becoming very oversupplied with gasoline. So I think right now, until at least the middle of March, we could look for even further decreases of perhaps two or three cents a litre.”

Oh, for those drivers searching even cheaper gas, and are willing to drive?

The best price in Calgary is listed at 64.9 a liter.

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