Squamish residents are getting a raw deal at the gas pumps and only public pressure can do anything to change the equation, says a local resident who used to work in the oil industry.
The man - who spoke on condition of anonymity because he doesn't want to jeopardize potential future job prospects in the industry - told The Chief that it concerns him that those who buy their gas Squamish this week were paying only one or two cents less than their counterparts in Metro Vancouver.
It should be more like seven to nine cents less, he said on Tuesday (Jan. 31). That's because the communities that make up Metro Vancouver -the area served by the public transit agency TransLink -levy a nine-cent-per-litre tax on gasoline to help pay for transit. Squamish customers don't pay it (and don't get the transit, either) but are still paying almost the same price at the pump, the man said.
He said it costs one to two cents per litre to transport the fuel to Squamish from the two suppliers - both in Burnaby - that serve all stations in the area from Hope to Pemberton.
"Because we're not paying a transit tax, our gas prices should be cheaper, but because we're in a market that's close to a place that has a transit tax, it looks like we're paying less, but we're really not," he said.
"We should be seven to nine cents cheaper than Vancouver at any given time, if all things are equal. The transportation is not that much."
On Tuesday, though, all eight Squamish gas stations were charging $1.25.9 per litre of regular unleaded gasoline. According to the website www.vancouvergasprices.com, the average price in Vancouver was 1.27.69, with two stations in Richmond charging $1.23.9 - the lowest price inside the area in which the extra TransLink tax is levied.
All other factors being equal, Squamish customers should be paying about the same as others just outside the TransLink taxation area, those with knowledge of gasoline pricing said this week. In Aldergrove on Tuesday, customers at one station were paying as low as $1.15.9.
But all other factors aren't completely equal. Market forces come into play, said both The Chief's unnamed source as well as Jason Toews, co-founder of GasBuddy.com, a Minnesota-based service that monitors gasoline prices across North America.
Toews said the presence of both small, independent operators and big-box retailers such as Costco -both of whom are sometimes willing to undercut competitors' prices to draw in customers - often causes downward pressure on prices in a given market.
Recent gasoline price wars in Victoria and Courtenay, for example, both were attributed to the presence of Costco gas bars in those markets, Toews said.
As for Squamish, "I would expect it to be 1 to 2 cents per litre higher [than other areas outside Metro Vancouver] and any other difference would depend on the competitive situation of the various stations in a community, but in the less competitive markets, the prices might turn out to be higher," Toews said.
"Gas companies do a survey of all the gas prices in their area and, in very competitive areas, stations can't afford to be too much higher than their competition or they lose business."
Squamish has three Petro Canada, two Husky, one Chevron and one Shell station. The station operating on Squamish Nation land is served by United Petroleum Products.
According to The Chief's source, just because prices tend to stay the same across town doesn't mean there's collusion taking place. It's just the big companies watching competitors' prices and matching them.
"Most of these sorts of reports stir up conspiracy theories, but really it's not about [conspiracies] as just about competition," he said.
Deidre Reid, manager of policy, government and public affairs at Chevron Canada in Vancouver, said that among Lower Mainland communities, the Abbotsford-Aldergrove area tends to have the lowest prices not just because there's more competition than in a place like Squamish but also because of its proximity to the United States border.
"In certain areas you do see a lot of traffic from Washington State and although they're two separate markets, we do look at that as well," Reid said.
"The Aldergrove-Abbotsford area really gets back to more of a price-war-type situation. It's really not, I would say, sustainable at that price over the long term."
Washington State customers pay the equivalent of about 14 cents per litre of regular unleaded in taxes, while those within B.C. but outside Metro Vancouver pay a total of 36.06 cents per litre - a combination of B.C. motor fuel tax, carbon tax, federal excise tax and goods and services tax, Reid said. Those in the Metro Vancouver region pay a whopping 45.06 cents per litre in taxes.
Reid said it costs virtually the same to staff and supply Chevron's Squamish gas station and convenience store as it does to staff and supply one in the busiest part of Vancouver. However, gasoline sales volumes do tend to be lower in Squamish, so the profit on the gasoline that is sold there needs to be higher for the station to make money, she said.
"We always try to offer our customers a competitive price in the markets that we operate in," Reid said. "There are certainly economies of scale at each site, and our Squamish station is certainly busy, although we don't see the same volume of traffic that you see, say, at a station at 41st and Oak in Vancouver."
The Chief's source contended in an email that if enough local people resolve to take their business to the station or stations willing to drop prices, things could change here.
"I know people in the pricing world of oil companies. There's no collusion, but it's known that Squamish gets screwed," he wrote. "All we have to do is make it a community issue and it will be addressed."
