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‘Patience is a virtue’: Analyst says gas prices expected to drop this weekend

Gas prices in the Border City may take a bit longer to drop before they compare to bigger centres, according to an analyst. Some gas stations may take a few more days before their prices get any lower but are expected to drop to 109.9 by Saturday

Bill 1: An Act To Repeal The Carbon Tax, came into effect on Thursday, May 30. It prevented fuel sellers from collecting a tax on their product as of midnight that morning. Five days later, it became law on Tuesday, June 4. Many Lloydminster residents expected a dramatic reduction in gas prices, however, those expectations were met with a tepid response.

According to GasBuddy.com’s price map, average gas prices for the regions splitting the Border City go from 122.168 in Saskatchewan to 112.067 in Alberta. Edmonton averages around 103.9 leading to a number of comparisons and complaints from residents. Senior petroleum analyst for GasBuddy.com, Dan McTeague, says that there are a number of factors outside of the carbon tax that are affecting gas prices.

“When I see a price increase in the markets, Edmonton and Calgary fire up like a rocket. But smaller communities – not that I’m saying Lloydminster is a small community – tends to hold off, there tends to be a lag time of a few days. That’s because they still have cheaper inventory and don’t want to be the first ones to raise their prices,” says McTeague.

The same problems can also happen in reverse. The wholesale price of gasoline fell almost 15 cents per litre, leaving many gas stations with a more expensive inventory than what they can sell for. McTeague argues the pumps shouldn’t be at fault for trying to stay in business and could go bankrupt trying to sell gas at a loss.

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Prices also fluctuate more wildly in larger centres due to how often they refill and pay market prices. The volumes sold at the pumps in Edmonton or Calgary often allow them to reap better deals from gas producers. McTeague says other factors, including tension in U.S.-China trade relations and increased tariffs on Mexico, are also contributing to market fluctuations.

“These are just things you can’t anticipate, and the markets are reacting violently. They’re very worried about what’s going to happen. The demand will collapse if there is no trade agreement between the world’s two largest economies.”

McTeague says that prices will take their time dipping below 110 and 105 and recommends only buying what you need. He adds that a similar problem is happening across the prairies; for as long as gas stations still have expensive inventory, they’ll need to sell it at the price they paid. McTeague says that this time last year, we were paying 14 cents more per litre and that things are already looking up.

“Patience is a virtue here, and I think the longer you wait, the greater the savings. Take only what you need, use the GasBuddy app, I think by Saturday, Sunday, maybe Monday, we’re likely to see a more pleasant drop, perhaps by that time below a 110 a litre.”

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