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Central Okanagan  

Mad about gas? You're to blame

Drivers in the South Okanagan might be wondering why gas is more expensive for them compared to other areas of the valley. It turns out, it could be their own fault.

On Friday, gas prices ranged from a low of 124.9 per litre for regular fuel in Kelowna, to a high of 135.9 in Osoyoos, and that has some citizens disgruntled.

"In Penticton, gasoline has been 133.9 for the last 3 weeks, while in Kelowna it was 126.9 and then was reduced to 124.9," said one caller to Castanet. "It seems very unfair that we're treated as second class citizens in Penticton."

According to Ross Hickey, assistant professor of economics at UBCO, there are a lot of variables at play when it comes to gas prices, but studies have shown them to be competitive.

"If the price of gas was the same everywhere you went in the Okanagan, the price of candy bars inside would be different," he said. "With gasoline retailers, even though the prices are varying, the market price that they pay differs depending on which kind of station they are and what arrangement they have with their supplier." 

Other variables include the relative wealth of a particular community. Hickey said in one course he taught at UBCO, he had students go buy common breakfast cereal from different stores around Kelowna. 

What they found is that a box of Fruit Loops cost more in the Mission area of Kelowna than it did in Rutland. The point is that retailers know they can charge more to certain groups and consumers reflect that by continuing to shop at that location, Hickey explained.

In Penticton, higher gas prices could reflect a more captive market, where residents may not travel up and down the valley as much. For example, if drivers were willing to go to West Kelowna for gas, they could get it for nearly 10 cents cheaper per litre.

Hickey argues that if drivers regularly did so, prices in Penticton might come down as retailers saw they were losing business. 

As long as people keep buying the product, the prices won't change.

To find your cheapest local gas source, check out Castanet's page here.

 

 



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