By Dan Walton
Oil prices may have taken a nosedive around the globe, but have only declined modestly at gas stations throughout the valley.
As of The Pioneers press time (Wednesday, December 17th), gas in Calgary could be found as cheap as 81.9 cents per litre, and averaging around 91 cents per litre. Yet gas at Petro-Canada in Invermere on that same day was 115.9 cents per litre, while gas stations in Golden and Cranbrook were pricing it at 109.9 cents a litre.
Back in September, oil was selling for about $95 a barrel, and at around $85 a barrel in October. By mid-November, it made international headlines when a barrel of oil began trading below $75 for the first time in over four years. And the declining trend didnt lose momentum. As of Wednesday, a barrel of oil could be bought for less than $60.
While the global value of a barrel of oil has dropped by more than 35 per cent over three months, the price at the pumps has not even been reduced by 20 per cent in the valley (having dropped from 139.9 cents per litre to 115.9 at Invermeres Petro-Canada).
Over that same period of time, oil prices throughout the province of British Columbia have seen a slightly steeper decline, from around $1.36 per litre to an average of $1.08 per litre.
I urge people, if they are concerned about gas prices in the area, that they write a letter or contact the Competition Bureau, Kootenay-Columbia Member of Parliament David Wilks told The Pioneer. They oversee the pricing of goods.
The Competition Bureau can be contacted by phoning 819-997-4282, or through a form on their website at www.competitionbureau.gc.ca.
While its nearly impossible to understand every attributing factor, the lack of price correlation in the valley is likely caused by a series of circumstances higher taxation (compared to Alberta), geographical challenges, and a lower turnover of inventory, according to Dan McTeague, senior petroleum analyst at GasBuddy.com.
In an environment where crude and gasoline prices are dropping almost daily on the world markets, and when their wholesale prices are dropping rather rapidly, (gas stations in the valley) may have well bought gas a week, or two, or three weeks ago when it was several cents a litre more, said Mr. McTeague.
Because there are no terminals or pipelines running through the valley, about two cents per litre has to be tacked on for a delivery premium, he added.
In addition to Albertas closer proximity to the refineries, its provincial government levies fewer fuel taxes, which keeps the cost down.
(Taxation) can be quite dramatic, Mr. McTeague said. Its not something you can easily discount.
While the future value of any commodity is always uncertain, he said the valley could be in line with a decrease say within the next week or so, somewhere within the order of two to five cents a litre.
But the behaviour of oil prices has entered into uncharted waters, he added. (The recent decline in prices) hasnt really had any parallels in recent memory. Normally if you get a month or so of falling prices, its followed by several months of increasing prices.
To get an idea of how crude oils pricing will behave into the future, and to find listings on where to buy the cheapest gas, either locally or throughout North America, the www.gasbuddy.com website or smartphone app is a good resource. We give a good indication when the prices will be adjusted, Mr. McTeague said.
As economic indicators are forecasting a lengthy turnaround, this article will be continued in next weeks December 26th issue of The Pioneer, further exploring the impact that low oil prices are having on the valleys economy.