Con­sumers lov­ing it but gas sta­tions los­ing money at cur­rent price

Medicine Hat News - - FRONT PAGE - MO CRANKER [email protected]­hat­news.com Twit­ter: MHNmocranker

If you woke up from a coma to­day and the first thing you saw was the price of gas — you might just think you’ve gone back in time.

Gas Buddy’s se­nior pe­tro­leum an­a­lyst Dan McTeague says gas sta­tions are los­ing money on the low price of gas but are do­ing it be­cause they have to stay com­pet­i­tive.

“It’s one of those rare times where it’s great to be a con­sumer,” he said. “It’s cut-throat com­pe­ti­tion and places are sell­ing gaso­line at four or five cents un­der what it costs them to re­place it.

“Big box stores that own their re­sources aren’t go­ing to be feel­ing this too much, but stand­alone stores would be feel­ing this a lot and they bet­ter be sell­ing a lot of beef jerky.”

McTeague says gas costs around 93 cents per litre mean­ing a loss of roughly five cents per litre sold. He says he is not sure how long the price will last.

“I re­ally can’t say how long these com­pa­nies will be sell­ing gaso­line and los­ing money,” he said. “It looks like ev­ery­one is fight­ing for mar­ket share and news broke re­cently that Husky is look­ing to get out of the gas sta­tion busi­ness — that’s a tell­tale sign they’re prob­a­bly tired of sell­ing gaso­line and los­ing money or get­ting peanuts for it.

“Con­sumers can en­joy this while it lasts, but it’s al­ways im­por­tant to re­mem­ber that there’s no such thing as a free lunch.”

McTeague says the big box stores are able to make up for the loss in dif­fer­ent ways — in­clud­ing spik­ing the price of diesel.

“If you look at a place like Costco, peo­ple may be sav­ing money on gas, but where are they get­ting hit in­side of the store?” he said. “Diesel isn’t cost­ing stores what they’re sell­ing it for. On a day like to­day (Thurs­day) diesel costs about $1.12 per litre, so right there is where you can see some of the loss in reg­u­lar gaso­line be­ing made up.”

NEWS PHOTO MO CRANKER

Gas prices have reached be­low 90 cents re­cently and an in­dus­try ex­pert says sta­tions are los­ing money on gas while try­ing to make some of that back on diesel.

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