City drivers paying high price at pumps
Big demand, shortfalls at city refinery push up cost
ENERGY ANALYST MICHAEL ERVIN “The big seasonal rises are typical. … We don’t expect to see the high prices at the current levels to sustain.”
A sustained spike in gas prices since the long weekend has left Edmonton drivers’ wallets feeling lighter, but experts expect prices to stabilize for the summer.
Prices peaked at 128.9 cents per litre Thursday, at least eight cents higher than the norm, said Jason Toews, co-founder of GasBuddy.com. But the jump still doesn’t match Edmonton’s record high of 135 cents per litre in 2008.
The price hike is mainly due to production shortfalls at an Edmonton refinery, Toews said. Costlier summer additives are also added into the blend, notching up the price.
And because of the city’s delayed spring, Toews said there’s been plenty of pent up desire to head outdoors. Combined with the May long weekend, demand has ultimately shot up while supply has waned.
Energy analyst Michael Ervin said the increase in wholesale prices is a regional phenomenon, which is why Calgary and the rest of the province have seen similar surges in price. Retail prices will typically lag behind wholesale prices for a week to 10 days. As wholesale prices swell, retailers are often forced to mark up their prices to remain sustainable.
“The big seasonal rises are typical. We see some unusual rises because supply goes up,” said Ervin, the Calgary-based principal of MJ Ervin and Associates. “We don’t expect to see the high prices at the current levels to sustain.”
Escalating gas prices aren’t necessarily deterring Edmonton drivers from hitting the road. Alberta Motor Association spokesman Don Szarko said that 800 to 1,200 drivers are surveyed every few years to determine how fuel prices dictate driving habits.
“For the most part, Albertans have told us that this is not going to change their behaviour,” Szarko said. “I think part of it is that Alberta is a booming province now. Our lifestyle and economy dictates spending a lot of time behind the wheel, particularly for work.”
It’s only when prices go up to 150 cents per litre that drivers seriously start thinking about reducing their number of trips, Szarko said.
“Having said that, I think there are some families who are probably going to start thinking about the long-distance car trips versus the destination vacations.”
Courier driver Paul Lima was filling up his car Thursday afternoon at Central Tire on 109th Street downtown where the price clocked in at 127.9 cents per litre. That was little assurance for Lima, who owns a floral delivery service and said he’s “majorly worried” about increases in gas prices.
“I used to put 50 bucks in this thing to fill it up and she’s already at 68,” Lima said. “We’re having a tough time making any money at this anymore. I’m going to have to raise my prices for my business or just close my doors and say enough is enough.”
Others like Nancy Stewart were topping off their cars because of concerns that prices would shoot even higher.
“This (price) is very high,” she said, capping her gas at $20 for her drive home. “When are they going to stop? I mean, this is kind of crazy.”