Opinion: There's little logic, and a lot of politics, when it comes to gas prices

If you drive a car, things have been pretty painful for the last few weeks. Gas prices hitting $1.70 per litre and higher have made filling the tank that much harder to afford, and relief looks like it’s not coming any time soon. Congratulations, we have the highest fuel prices in North America.

But I have to wonder where the logic is in some of this as well. Living where we do, we have an alternative, although it’s not good for our economy. Point Roberts has five gas stations. Five. For a population of roughly 1,300 (in winter, I’m assuming...).

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Point Roberts isn’t that big a place. I’m sure a fill-up would last a while, unless the person is coming through Canada for some reason. It doesn’t take a rocket scientist (and I am far from a rocket scientist!) to determine that Canadians are keeping those stations in business.

So how do the local stations respond? First off, they respond the way their head offices tell them to respond. There is little flexibility in determining fuel process on the local level. You get a call, you change the price. Full stop.

You would think, knowing how close we are to the border, they would have prices that would try to keep people in Canada, buy fuel here, pay taxes here, perhaps pick up a lottery ticket or a chocolate bar for the local retailer to make additional sales.

But this is where logic defies me. I drive through Richmond every Thursday evening. As I drive back, I pass two gas stations, so I’m always curious what price they have posted. It would make sense that it would be a couple cents per litre higher there compared to where we live.

Inevitably, however, there is a gap, sometimes a significant gap, between the prices. I don’t understand how sometimes it can be as much as 10 cents per litre cheaper in Richmond than in Tsawwassen. Let’s not forget as well, Richmond has a local policy that every gas station be full-service.

People being people, they will look for ways to save where they can, depending on how much value they put on their time. An hour wait at the border to save $15 on a fill-up is no big deal for some, so they will head south for a tank. Others will see that as a burden, and opt to fill the tank up here. But it would make sense to at least match the prices in Richmond to try and keep people up here.

Fuel prices always become a political football as well. Governments fall because of what we are paying at the pump, even though there is little they can do about it (except shave off a few pennies by reducing taxes). The typical response is to blame the fuel companies for high fuel prices. But a lot of our fuel comes from the U.S., which also supplies the stations in Blaine and Point Roberts.

I was in Edmonton a couple weeks ago. The price was $1.17 a litre. Too bad my jerry can wouldn’t fit in the overhead bin. And they did look at me a little funny going through security.

Brad Sherwin, MBA is a long-time resident of South Delta, and has almost 30 years’ experience in marketing, public relations and business strategy. He teaches marketing at Douglas College, coaches hockey goalies and is president of the board of directors at Deltassist. 

 

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