Prowling the Pumps – September 2, 2008

On the case, lurking at service stations across the country to find the lowest and highest gasoline prices in Canada.

Average across Canada

Another rise, but it can be explained away. Really. The average price of gasoline in Canada climbed 5.6¢ this week. Our hypothetical 80-litre tank was $4.48 more expensive to fill this week than last. Gasoline prices rose in seven provinces, but dropped in New Brunswick, Newfoundland and Labrador, the Yukon, the Northwest Territories. They remained the same in Prince Edward Island. However, there is a trend here. Newfoundland and Labrador, the Yukon and the Northwest Territories lag behind the other provinces when gasoline prices are dropping, so one would expect them lag when prices are rising as well. It has to do with extended supply lines, storage capability and bulk purchase. New Brunswick did well (more on this later) because it is home to Canada’s largest refinery.

So. The explanation for rising gasoline prices. Tropical Storm Gustav was heading straight through the Gulf of Mexico to refinery row on the Texas/Louisiana coast, gathering strength as it crossed the warm gulf waters. Energy traders expected Gustav to become a hurricane and severely damage not only refineries but offshore production platforms. Consequently, oil and gasoline prices climbed. Although Gustav was still a devastating event, it spared the refineries and production platforms. Consequently, prices dropped, but did so after the weekly retail fuel price survey was conducted.

Least Expensive Gasoline in Canada (per litre)

Alberta is bounced out of the low-cost five, not by Ontario, but by New Brunswick. Not surprising seeing as the Saint John refinery is the largest in Canada. And very opportune timing-wise. Visitors to New Brunswick can take advantage of the cheap gasoline while they’re taking in the spectacular fall colours.

Most Expensive Gasoline in Canada (per litre)

Pretty much the same story as last week for the pricey five. Substitute Vancouver for Gander.

Following the demise of Gustav, West Texas Oil prices dropped below $110 US per barrel for the first time in recent memory. April 2007 to be precise. We’re probably in for a roller coaster ride at least until hurricane season is over in another three months, especially with Hanna, Ike and Josephine warming up in the wings.
We’ll see what happens next week.