Expert says that local gas prices don't add up

By Hayley Ferguson
June 20, 2019 - 2:24pm Updated: June 20, 2019 - 7:26pm

 

Medicine Hat, AB - With the provincial carbon tax coming to a halt three weeks, gas prices have started to fall across Alberta.

Prices are down an average 12 cents from last month. Except in Medicine Hat.

Today, gas prices across the city were around $1.17 a litre, which is about 16 cents higher than the provincial average

Dan McTeague, a senior petroleum analyst with Gas Buddy, says no matter how he looks at the numbers, he doesn’t know why they are so high in Medicine Hat

“Unless someone is hiding something, the reality is that prices for gasoline today, on those markets are about 70/71 cents a litre,” he said when asked about wholesale prices.

McTeague says that once he adds transportation costs and taxes, gas stations are still buying their fuel for no more then a dollar a litre.

That's why he says that these prices are “in many respects, unjustified” and is hopefully they will go down soon.

“It happened a few weeks ago. We should now be seeing prices more in line with what the wholesale price is plus taxes plus a normal retail margin which is about 12, 13 cents a litre.” he said. “Not 16 or 17. From my stand point these prices should be down at least five cents a litre.”

McTeague does warn people to not compare fuel prices to those in Calgary.

“You see a lot of gas stations selling gasoline below cost. That isn’t a proper indication either of a properly funded market.” he continued. “Over there is really a response to several players driving costs below what it takes for them to buy their fuel at the beginning of this and often selling for as little as 91, 90 cents a litre. They are obviously giving away money because there’s no other way to explain it.”
 

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