Unifor-Co-op dispute not likely to affect gas prices: Analyst

As the labour fight between Regina’s Co-op oil refinery and Unifor stretched into Day 54 Tuesday, a petroleum analyst said no matter how long it lasts or what the outcome of the dispute is, it’s not likely to affect gasoline prices at the pump.

“Tracking the history of gasoline prices in Regina and Saskatoon, I think they’ve been holding up pretty well versus the national average. The lowest prices from what I can see have been in Winnipeg, which is a notorious area for price wars anyway,” Roger McKnight of Ontario-based En-Pro said.

The longtime oil industry analyst said gas prices are mostly dependent on the price that wholesalers want to pay for crude oil.

Those prices are first determined in Minneapolis, Minn., for regions in Canada that are west of Thunder Bay, Ont., he said.

“(Those prices) go up, then the Chicago prices go and so forth, so it dominoes right across the border, across the prairies,” he cited as an example.

“Basically prices in Canada aren’t made in Canada,” because crude is an internationally traded commodity.

A Canada Competition Bureau webpage confirms as much, showing that crude oil prices (40 per cent) and taxes (35 per cent) make up the majority of the price of retail gasoline in the country.

As of noon on Tuesday, west Texas intermediate crude oil was trading at $53.45 per barrel.

McKnight said the labour dispute also shouldn’t have an effect on the supply of gasoline at retail stations.

“I understand management and some outside workers are running the refinery, and that seems to be holding up OK,” he said. “As long as that situation is in place, I don’t see much of a problem so far as getting gasoline actually to the service station, unless the picketers start blocking off wholesale outlets, which would create a problem.”

The only other way picketers could affect gasoline supply is if they were to stop “trucks from delivering gasoline to service stations,” he said.

He predicted retail gas prices will drop in Canada if Chinese cities continue quarantining their residents due to the coronavirus.

“China is the second-largest consumer of crude oil in the world,” he said. “If all of a sudden major cities in China get shut down by quarantine, that cuts back on demand for crude oil.

“That means prices drop worldwide, because it’s a global issue.”