Fill ‘er up Edmonton, at an average 61 cents per litre, it’s the lowest gas price in Canada

Free-flowing refineries are prompting a “bloodbath” for retail gasoline prices in Edmonton, one analyst says.

BY THE NUMBERS
– Lowest price of gasoline in Edmonton: 57.9 cents
– Average price of gasoline in Edmonton: 61.4 cents
– Average cost of gasoline in Alberta: 67.8 cents
– Average price of gasoline in British Columbia: 95.3 cents
– Average national price: 85.0 cents
– Highest price of gasoline in Canada: 122.7 cents, Fort Smith Region County, N. W. T
(by Tuesday, Feb. 9, 2016 in cents per litre)

With Edmonton gas prices averaging 61 cents per litre Tuesday, GasBuddy.com petroleum analyst Dan McTeague said prices haven’t been this low in the town since Dec. 2003 and therefore are prone to sink much lower. Some stations were at 59.9 cents per litre.

McTeague said prices in Alberta are expected to fall four to six cents by Friday to sit down around 56 cents per litre over the weekend.

“If you think these are good prices, just wait. The roller-coaster hasn’t hit the bottom yet,” he explained within an interview from Toronto.

“If I’m taking a look at Edmonton, these are the best money saving deals in the country, bar none.”

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Gasoline prices are heavily associated with the cost of oil, which fell Tuesday to levels not seen in almost 13 years, dragging on the Toronto Stock Exchange two percent as investors grow increasingly concerned there’s too much crude on the world markets.

The March agreement for North American benchmark crude fell US$1.75 to US$27.94 per barrel – a small amount of nearly six percent.

Kash Pashootan, a portfolio manager at First Avenue Advisory, said the oversupply issue won’t be resolved until you will find closures in the western world, where crude is more epensive to create than Saudi Arabia.

“We should ‘t be surprised to see oil still drop until we have seen supply erode or decline, which hasn’t happened yet.”

Petroleum refineries are finally starting to make the most of low oil prices, McTeague said, resulting in an “exceptional” rate of production that’s prone to drive wholesale prices down for an extended time.

“No one’s blinking. They’re all producing, they’re all over-producing and we’re still a good ways away from Easter long weekend.”

The low wholesale costs are also fuelling competition at the retail level, said McTeague, particularly in Western Canada, where stations can sell at razor-thin profit margins to try and move as much gasoline to consumers as possible.

“For retailers, it’s simply a bloodbath … Your retail margins are gone. Kaput. It’s all about volume.”

McTeague called the situation “bittersweet” for motorists experiencing the economic downturn but glad for some relief at the pumps.

“A minimum of individuals are getting one take advantage of low crude, finally. Gasoline has not been following crude at all until the last couple of weeks so it’s a welcome turn of events.”