(With files from Jay D Haughton)
Humboldt and area gas prices have relaxed in recent days from a high that flirted with $2.00 per litre to the current median of 158.9. Meanwhile gas pumps in the region are displaying slightly higher prices and a few highway fuel stops showing slightly lower than the regional average.
Patrick DeHaan, GasBuddy Petroleum Analyst says that with oil prices decreasing, gas station owners have the ball in their court in terms of the speed of how much they lower their prices compared to if crude oil was rising.
“Normally when prices are going up there are very few decisions, stations have to pass along the increase or they lose money. Whereas when prices go down they can take time, if they want to make more money they lower their prices slower, and if they want to make less money they lower their prices faster.”
DeHaan notes that this year has been the most volatile in terms of fluctuation in oil prices he’s ever seen in his current role for GasBuddy.
“The imbalances brought on by COVID-19 have lingered into this year. Then they were exasperated by Russia’s war on Ukraine. I’ve never seen this amount of volatility in my career doing this, it’s just been off the charts.”
When gas stations purchase their gasoline from a bulk storage terminal, they do so at a wholesale price, and in order for them to make money, they will have to mark the price up.
“I know it’s usually a couple of cents a litre, but right now it could be upwards to 15-25 cents a litre, depending on the exact circumstances and how quickly the station's timing. And that’s why you can see a spread of 15-20 cents a litre on occasion is because one station went down and passed along the lower prices much faster than another.”
As mentioned before the price of oil has decreased significantly in the past few weeks, but why?
“It’s because of economic concerns. The U.S. now has seen two back-to-back quarters of negative GDP, so they are rising risks that major economies in Europe, China, and the U.S. could be slipping into a slow down or recession, which will generally curb the use of oil.”
In Saskatchewan, importers bringing gasoline to stations pay a provincial fuel tax of 15 cents litre on gas and diesel and 9 cents per litre on propane. At the federal level, Saskatchewan stations pay 10 cents per litre on gas and 4 cents on diesel.