An­a­lyst backs up Rick­ford

Re­tail margin on gas “huge” in Kenora, re­gion, doesn’t line up with mar­gins in sim­i­lar mar­kets

Kenora Daily Miner and News - - LOCAL NEWS - ERIK PINDERA epin­[email protected]­media.com

The re­tail margin on gaso­line is huge for gas sta­tions in Kenora and the re­gion, a petroleum an­a­lyst said.

Dan McTeague, se­nior petroleum an­a­lyst with GasBuddy.com and a for­mer Lib­eral MP, noted gas sta­tions in Kenora sell­ing gaso­line at around $1.28 per litre are pay­ing “no more than $1.06” per litre.

A 12 cent per litre re­tail margin is “con­sid­ered gen­er­ous”, McTeague said, not­ing that margin is stan­dard in the in­dus­try. Kenora gas sta­tions are sell­ing gas per litre with about a 22 to 23 cent margin, McTeague said, af­ter an­a­lyz­ing the whole­sale rack price per litre plus ship­ping costs re­tail­ers likely pay for gas in Kenora, dur­ing a phone in­ter­view with the Daily Miner and News.

McTeague noted that re­tail­ers in big­ger mar­kets like Win­nipeg can make a profit sell­ing gas per litre at a lower margin be­cause of both the vol­ume sold and com­pe­ti­tion in the mar­ket.

How­ever, “some­one’s got some ex­plain­ing to do” about the high margin Kenora gas sta­tions ap­pear to be mak­ing, McTeague said.

“They can’t make a go of it sell­ing for 15 cent re­tail mar­gins – they need 22, 23 (cent mar­gins). That seems a little odd. There are a lot of small towns in the coun­try where we don’t see that,” McTeague said. ”I think of Al­berta, or Saskatchewan — towns that are cer­tainly smaller (than Kenora) — where you don’t see that big vari­a­tion, they’re al­ways within that 12 cent re­tail margin area.”

McTeague’s com­ments come af­ter On­tario’s min­is­ter of en­ergy, northern de­vel­op­ment and mines, Kenora-Rainy River MPP Greg Rick­ford, called on the Com­pe­ti­tion Bu­reau to re­view fuel pric­ing in North­west­ern On­tario in an an­nounce­ment Fri­day, Nov. 30.

Re­tail gaso­line and diesel prices have not dropped sig­nif­i­cantly in North­west­ern On­tario de­spite the prov­ince ax­ing the cap-and-trade car­bon tax, which knocked 4.3 cents per litre off the whole­sale price of gaso­line and 5.0 cents per litre off the whole­sale price of diesel fuel.

“(Rick­ford’s) con­cerned that the whole­sale prices have dropped but they haven’t dropped at the re­tail level? He’s got a point,” McTeague said, not­ing his ex­pe­ri­ence with the Com­pe­ti­tion Bu­reau in the past has been frus­trat­ing. “In any event, it’s self-ev­i­dent. It doesn’t take much to fig­ure that out when you con­sider the whole­sale rack price, which is the pub­lic price.”

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