Is cooperative gas the answer to pressure at the pumps?

As gas prices in Alberta have crept up — and stayed up — many Edmontonians are looking for ways to save at the pumps.

For some, the key is in cooperation.

Don Smith, vice president of UFA Petroleum, said new members and users have skyrocketed. It’s not surprising given the picture at the pumps.

On Wednesday, GasBuddy showed eight of the top 10 lowest gas prices in the province at UFA locations. In Edmonton on the same day, the site showed the two city UFA locations at less than $1.46/L, while the CAA listed the average price in the city at 1.67/L.

“Retail has its own pricing dynamics, and we kind of really don’t pay attention,” Smith said. “We do our pricing our way.”

UFA takes a wholesale-like approach to gas, leading to lower prices for customers. And those who buy in bulk can see even more savings, Smith said. Because it is a centralized collective, the 120,000 members are able to access all UFA locations and card locks. 

Card lock stations are 24-hour automated fueling stations that use a card to access the pump. UFA has four in the greater Edmonton area, and all are open to anyone with a card. New members and users should be aware that listed UFA gas prices don't include the 5 per cent GST.

He said there are benefits to membership, like discounts and potential dividends, but cards can be ordered through the website by anyone for no charge. Smith said UFA has seen more card requests and membership applications in the first half of 2022 than in the last three years combined.

“This level is surprising. It’s pleasing. It’s nice,” Smith said. He adds that the last few years have seen great changes in how people are buying things, and saving on gas makes a lot of sense.

Because they are a cooperative, members also receive dividends at the end of the year and have a say in how UFA is run, but Smith said people shouldn’t expect a check if they’re just going for gas. There are some ways to earn dividends on purchases, but regular fuel isn’t one.

Dan McTeague, president of Canadians for Affordable Energy, said card locks aren’t the solution to high gas prices because they don’t respond to the real problem — higher retail margins for retail gas providers.

“The reason you are able to maintain prices with such a steep, unprecedented retail margin, suggests to me that there is a loss of competition at that level, and that’s a bigger question,” McTeague said. He points out that, including taxes, gasoline currently costs $1.32/L to buy wholesale. A normal margin would be 15 cents, he adds, meaning prices around 1.60 don’t make sense.

“That market reality in Edmonton would be $1.51 or $1.52 per litre,” McTeague said. “Gas stations are taking advantage of the public to the tune today of at least 20 cents a litre, and they ought to curb their enthusiasm, drop those prices.”

Smith said he isn’t surprised that the UFA membership and customer base is growing as people respond to inflation pressures and change the way they buy. Predominantly a rural collective, Smith welcomes the surge of members and users in the city.

“It is important for people to know that we, UFA, does exist,” said Smith. “UFA is Albertans here to support Albertans. And I think it’s important to know that there is a cooperative here that does that.”