What’s making gas fluctuate in western Canada? Roger McKnight explains
Why did the price of gas fluctuate this week in Edmonton?
Edmonton,Alberta / 630 CHED – Edmonton Breaking News, Traffic, Weather and Sports Radio Station
Kyle Morris — Posted: February 19, 2016 04:07 pm
You may have noticed some volatility at the gas pumps lately around the city.
Prices jumped up around 20 cents earlier this week, and then fell the same amount a day later.
Roger McKnight, the chief petroleum analyst with En-Pro International, explains why we’ve seen unsteady pump prices.
“What you have there, not only in Alberta, but right across the prairies, is a massive price war that’s been going on for about three weeks,” says McKnight. “(It’s) to the point where retailers are selling well below cost, they’re selling for nothing. The oil companies, believe it or not, are getting well below their wholesale price.”
McKnight says the reason is because companies are competing in “price wars.”
“Price wars are really to protect their market share. If an oil company losses a national account, it losses it not only in Edmonton and Calgary, but also in Saskatoon, Vancouver and Toronto as well. So, they have to fight in a war to maintain that volume.”
McKnight added that you can expect the price of gas to go up in the near future.
“This is a funny time of year, in 12 of the last 13 years, gas prices actually go up at this time. (That’s) because refineries go into planned maintenance, which means they’re getting ready for the driving season which starts at the end of May. So, they tweak the refineries to give a higher yield of gasoline to keep up with demand. So, that normally starts shrinking inventories.” (km)