Consumers always eventually lose gasoline game of chicken
Have you noticed gas stations around town taking turns playing chicken for the past few weeks?
I’m sure you saw it — the posted price for regular unleaded at a particular gas station would suddenly soar to $1.23 a litre, or even higher.
I heard that the Shell station on the highway hit $1.30 or more per litre.
The jacked-up price would hold for several hours, at least.
Meanwhile, there are very few customers gassing up at that location.
I wondered if jacking the prices up was a way to take it easy and kick back for a few hours.
Soon enough the station trying to be a price leader thinks better of it and drops back to the price just about everyone else is charging.
Then it’s someone else’s turn to try.
The price spikes rolled around town from the Co-op, to Safeway and then on to the Superstore — those are ones I saw.
Within hours the price rebel would back off and join the crowd again — sometimes notching it down a cent or more a litre below what most others are charging.
What we have been seeing here is our local gasoline market trying to match what has happened in Vancouver, Victoria, Nanaimo and elsewhere in B.C.
Vancouver-area prices are generally about $1.309 to $1.339 per litre or higher; Victoria this week has seen $1.249 per litre; while Nanaimo prices have been up to $1.299.
Ladysmith prices have generally tracked what we have been experiencing in the Duncan area.
Petroleum industry analysts say that these price levels are being reached for two basic reasons.
First, crude oil prices have been rising in the world market, starting last October and November.
They say this represents surging demand and not supply interruptions through accidents or military hostility.
It generally takes about three months for world price changes to work their way through to wholesale and retail gasoline prices and we are seeing that happen now.
The second reason is that there is a little bit of a gasoline shortage here on the west coast of North America as many refineries take downtime for routine maintenance.
Most people in B.C. do not realize much of the gasoline we consume comes from south of the border.
The way wholesale prices are set makes them sensitive to day-to-day demand and supply circumstances of the refined product, and when supply is tight, prices go up.
The long and short of it is that those price increases have hit us here in the Cowichan Valley.
One day during this past week the prices at all the gasoline stations in our area rose together in magical synchronicity.
The good news, though, is that the experts say that we will not likely see the peaks we saw in 2008 when we lived through the price of regular unleaded soaring to almost $1.50 per litre.
Patrick Hrushowy is the president of the Cowichan Valley constiuency association of the B.C. Liberal Party. Email him at firstname.lastname@example.org