‘Shocked’ at the pumps
Islanders react to the increases to the cost of regular unleaded gasoline in the past week
P.E.I. residents were coming to grips on Wednesday with an eight-cent price increase for regular unleaded gasoline that was implemented overnight. That increase, combined with a four-cent price increase last week, brings the total to 12 cents per litre (cpl) in the past seven days.
“Shocked,” said Laura Kell, while fueling up at Cudmore’s Ultramar on University Avenue in Charlottetown, adding she believed it was going to be more of a problem for people who have to commute to the city.
“I don’t live in the country, so it’s not going to change my habits. It’s going to make it more expensive, I guess. You’re going to have to cut back on other things you might spend your money on.”
Also going up overnight were furnace and stove oil by four cents per litre and diesel fuel by three cents per litre.
The price for regular unleaded gasoline at self-serve outlets now ranges from 120.6 cpl to 121.8 cpl while the price of diesel ranges from 112.7 cpl to 113.9 cpl. Furnace oil sits at a maximum price of 76.3 cpl, plus tax.
Cudmore’s Ultramar was selling regular unleaded gasoline for 120.6 cpl.
Randy Gobble, who also gassed up his truck at Cudmore’s, said he understands the rationale behind the price increase, but he added that it is still “quite a jump.” Joseph Corrigian, owner and manager of City Taxi in Charlottetown, said its business as usual for drivers, but they are going to have to absorb the price increase. He added that he hopes the price at the pump drops soon.
“That’s the bottom line. But not much you can do about it,” he said.
Allison MacEwen, director of regulatory affairs for the P.E.I. Regulatory and Appeals Commission (IRAC), explained the 12-cent price jump was in reaction to the impact hurricane Harvey had on the supply of gasoline and wholesale prices in terms of shutting down or reducing capacity at refineries and pipelines.
“Whenever you have, essentially in this case, a supply crisis, the market reacts fairly quickly and sometimes fairly brutally. And, that’s kind of what happened to us,” he said.
With reduced supply, the competition for other supply sources drove up the wholesale price in commodity exchange markets in the U.S., which, in turn, increased the cost to supply Atlantic Canada.
Since the end of August and prior to the price increase at the pumps, wholesalers were losing money for gas sold on the Island, he said. As well, the only way wholesalers could recover their economic loss was if the commission stepped in and raised prices at the pumps, he added.
“In the short term, you can absorb some of that. But, in the long term, if left neglected, the pricing situation could ultimately lead to interruptions in supply, which is something that we don’t want.”
As the situation improves in Texas and pipelines and refineries are getting back on line, MacEwen said consumers could see gas prices drop. But MacEwen is also keeping a close eye on hurricane Irma as it makes its way through the Caribbean and heads toward Florida. He said if it moves into Mississippi and Louisiana and impacts more refineries, “that could mean real trouble for us all because it could aggravate the current situation.” MacEwen said the commission is expected to meet by the end of the week to assess the situation.