C-K gas prices will fall…eventually: expert

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The word from the gasoline experts over lingering higher prices in Chatham-Kent: It is what it is.

With the onset of a temporary relief of 5.7 cents a litre on provincial gas taxes (there is still a nine-cents-per-litre tax), combined with tumbling wholesale gas prices, many other locations in Ontario are seeing relief at the gas pumps. Some places have seen prices drop to around $1.73 cents a litre, but in Chatham, the prices lingered into the mid-$1.90 range.

One Wednesday morning, however, at least one station was selling gas at $1.86 a litre.

Patrick De Haan, head of petroleum analysis for GasBuddy, a website that displays gas prices to users with the click of a mouse or the tap of a screen, advised people to wait it out.

“Think of the decline in price as a marathon. Some stations are going to run that marathon faster. Some are going to run it slower,” he said. “Eventually, over time, they all finish the race. The problem is they have wide latitude on how quickly they want to finish.”

It is a case of the tortoise versus the hare. Unfortunately in Chatham, the tortoises appear to be present running the gas stations.

“Stations may have a self interest to lower the prices slowly, as they are making more margin as a result,” De Haan said.

As well, they may have paid substantially more for the gasoline that sits in their storage tanks and don’t want to take a loss. De Haan said that could actually negatively impact such stations in the long run.

“A lot of the laggers are the ones who don’t sell as much gas. They may have bought at a far higher price,” he said. “But if you sell it faster, you can also get the cheaper fuel and start making a profit. Wholesale prices have plummeted. But there are a lot of different agendas.”

Word from the gas companies is obscure. Jainess Lei, a Petro-Canada customer service rep, told The Chatham Voice that fuel “is a complex commodity and the price is influenced by many factors of the open market.”

Those include gasoline taxes from the federal and provincial government, the price of crude oil, the price of wholesale gasoline, and refining and marketing costs.

However, with the wholesale price down and the taxes down, Chatham-Kent residents are left scratching their heads and paying more at the pumps still.

A number of local residents have reached out to The Voice to complain about the lingering high gas prices. Some mentioned collusion among oil companies.

De Haan said it’s not collusion at work here.

“It’s the status quo, not collusion. There is no collusion; there is silence,” he said. “I know people get frustrated.”

He said the war in Ukraine continues to impact gas prices, as well as the lingering effects of the pandemic.

“Oil companies are doing very well, but that doesn’t mean the gas stations are gouging,” he said.

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