Most gasoline retailers have zero control over their prices.
Their either sell on consignment or sell on a contract that bases their retail prices on a stadard rack price set by the refinery.
Sometimes you’ll notice that all the gas stations in one region (ie: in Rupert) have the exact same price. You’ll also notice that they all seem to change their prices at the same time. You can safely conclude that they all buy their gas from, or sell on consignment for, the same wholesaler or refinery.
ie: there’s no competition at the wholesale and refinery level. It has nothing to do with retail – they don’t get to set their prices.
Now some enterprising retailers will “discount” gas – ie: Shell in Terrace will give you back 3.5cents per litre. So ask yourself why they don’t just lower their prices by 3.5cents? They don’t get to set their own prices – it’s set by the refinery or wholesaler.
There’s no economic reason for price to be more expensive in Rupert than Terrace, other than it is, and since there’s no competition, what are you going to do about it?
Only when you get competition at the wholesale and refinery level can you have lower prices. That’s what happened in Ontario a little while back – it was actually cheaper to import gas from the UK than it was to buy it from the refinery down the road. The result was that retailers could buy from more than one wholesaler, and there was a price war.
So when you see places in BC that have different prices at different stations, it’s safe to conclude that it’s a place that isn’t “controlled” by just one wholesaler or refinery.
Bottom line – don’t blame the guy who owns the station.
Photo of me filling up in Terrace today:
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