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Kelowna  

We're getting hosed for gas

Kelowna motorists are getting hosed every time they fill up at the pumps.

That according to Dan McTeague, spokesman for the industry watchdog GasBuddy.com.

In an interview with Castanet News Tuesday, McTeague said gas retailers are pocketing a tidy profit of about 18 cents per litre, unheard of in the gas industry.

"These are among the most generous margins in Canada," said McTeague.

"It shows a complete lack of willingness to compete."

He called the current margins excessive.

Taxes in, McTeague said retailers are paying about 97 cents a litre from suppliers in Kamloops.

Factor in the cost of transportation (two to three cents a litre), and business costs, he said the price should be about $1.08 or $1.09 a litre, not the $118.9 currently being charged at most pumps.

Putting it all in perspective, McTeague said the wholesale price is 61 cents a litre. Federal and provincial taxes are another 31.17 cents – and multiplying everything by five per cent, the total is 97.3.

"If I'm looking at Vancouver today, the cost of real estate is far greater, and yes, there may be higher numbers of people driving through there, retail margins are nine to 10 cents a litre which are considered very good.

"Toronto, nine, 10 cents a litre. Montreal, sometimes four, sometimes 10, sometimes 12. Victoria today, about 11. How do you get away with 18."

Since June 10, McTeague said the wholesale price has dropped nearly 15 cents a litre, while the price at Kelowna pumps has fallen just five cents.

"There is a lot of money being made, and it's consumers that are being held to the highest prices in the province considering the wholesale price of gasoline."

McTeague said Kelowna is crying out for more competition, perhaps from a big box retailer such as Costco, to ensure there is at least some discipline in the retail margins.

"They tend to maintain their enthusiasm when it comes to driving prices up, usually because they want to match the other competitor in Kelowna. As a result, consumers are left holding the bag," he said.

McTeague said it just means people have to dig a little deeper into their pockets.

Vernon ($117.9) and Penticton ($118.9) are also on the high end of the scale.

The average price for gas in the province Tuesday was $118.9 while the lowest price was $103.9.

The higher pump prices may mean Okanagan motorists will avoid the yearly price bump in advance of the Canada Day long weekend.

While the Okanagan endures higher pump prices, McTeague said overall, prices are lower than they have been in several years.

A report from GasBuddy in the United States predicted gas prices south of the border will reach its lowest levels since 2005.

It also projects a return of a sub-$2 per gallon national average as soon as early November.

In Canada, McTeague said a slumping Canadian dollar will prevent our prices from getting that low.

"What's driven prices down in the United States is, of course, lower crude prices.

"But, the trade off is, that while crude has dropped, so too has the Canadian dollar. Purchasing power is taking a hit. We don't get the advantage the Americans get."



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