Two of the gas stations in Smithers lowered their prices on Thursday morning. (Marisca Bakker photo)

Two of the gas stations in Smithers lowered their prices on Thursday morning. (Marisca Bakker photo)

Gas prices in Smithers lower but remain higher than surrounding communities

Analyst says a lot goes into determining gas prices

Gas prices in Smithers have come down today but are still higher than surrounding communities.

Gas in Smithers is just hovering over a dollar a litre but it has been under 90 cents a litre in Hazelton for a couple of days and it is currently 99 cents in Houston.

Patrick De Haan, the head of petroleum analysis at GasBuddy.com, said there are various factors that go into determining gas prices:

“One: price of crude oil, two: individual state taxes, and three: proximity of the gas station to supply sources, like refineries and pipelines and four: perhaps the largest factor (and a very loaded word), competition,” he said in an email to the Interior News.

“Competition sounds simple but is the most complicated of these factors. How many stations are nearby, how much gasoline they sell (are you in a small town or large), average incomes, traffic counts, who the stations buy from, their strategy, are all different from one another. Some stations may drop prices faster to try and “steal” traffic from filling up at the competition, which could turn into a price war.”

Copperside Foods, which has a lease with Petro Canada, has prices higher than other communities because it has already paid a higher price for what it has on site, said manager Greg Wedlock.

“We get our tanks full and we pay a certain price for that and then all of sudden the gas goes down. We don’t have control.”

He added that Copperside Foods is a small company out of Terrace and has to follow the lead of other stations in Smithers.

“So when the price goes down somewhere else we have to wait to see how long we are able before we have to go down. We want to be fair. All the prices are adjusted by Esso and Chevron’s reaction, we respond to that to make sure we are on par with the community.”

He says he feels the community pressure and doesn’t want to be known as a company that gouges.

“Right now I’m making four cents on every litre. If it goes below four cents, I lose money. It is all the people at the top and filters down and into the pumps, between all the taxes, we get hit with a northern tax for a transportation fee so when it comes down to it we are making four cents,” he said. “The main thing is what did we pay for it in the ground. So if I have a full tank and suddenly the gas drops ten cents, we are making pennies per litre. A lot of people think we are getting rich, it isn’t us, it isn’t Copperside Foods, it is a lost leader, it gets people into the station and buy things at the store.”

Smithers 7-11 manager Sunil Kamboj said its headquarters in Surrey decides the price of the gas he sells at the Esso pumps.

“There were quite a few people complaining and then when it was 1.24 to 1.06, it should have been higher at that point and there is no change since,” he said.

Wedlock added that he’s also heard a lot of complaints from customers.

“We are five or six cents more a litre and people will whine and complain but spend $5 on a bottle of water, it is perspective but for some reason gas seems to have an emotional attachment.”

Smithers Interior News