Gas prices jump in Sask. after stations were selling gas at cost

It seems to be a recurring theme in Saskatchewan: every time the price of gasoline increases, “why?” becomes a popular question.

Just before the weekend, prices at Regina gas stations started rising, going from 87.9 cents per litre to 96.9 cents. Stations in Saskatoon followed suit, increasing from around 88 cents per litre to 97.9 cents.

There appears to be a very simple reason for this.

Roger McKnight, chief petroleum analyst with En-Pro International, explained to 650 CKOM’s MainStreet program that before the increase, stations were selling their gas at cost.

“The normal margin is about 7.5 cents a litre, and at 87.9 they were basically buying it at that price and selling it at that price.”

McKnight said the big box stores usually lead a thing like this, where “they just want people to get on the lot and to get the people in the stores to do their Christmas shopping.”

For the owner for a gas station and convenience store, this is a difficult way to conduct business.

McKnight pointed out “somebody said ‘enough is enough’ and decided to get back into the business of selling gasoline at a profit or at least to cover their cost.”

Since the margin is higher than it normally is, McKnight expects prices at the pumps to drop by about three cents over the next few days.