Edmonton News | Local Breaking | CTV News Edmonton
'Never this difference': Rural drivers sound off on high gas prices
Published Friday, April 3, 2020 4:44PM MDT
EDMONTON -- City gas prices have fallen to levels not seen in decades, but drivers in rural Alberta say they've yet to see those kinds of savings in their communities.
The combination of the ongoing COVID-19 pandemic and oil price war has kept pump prices in Edmonton and Calgary hovering around the 60 cents-per-litre mark.
But in Vegreville, about an hour's drive east of Edmonton, gas prices on Friday were at a pre-pandemic level of more than 86 cents-per-litre.
"I don't know why it's so high out this way," one driver told CTV News.
"I've seen a two, three, four, five cent difference," said another. "Never this difference."
With similar price disparities in other rural community, industry analysts are calling the situation unprecedented in recent history.
"It's very unusual," said petroleum industry analyst Michael Ervin. "But these are unusual times of course."
Ervin says gas stations base their price on how much they paid to buy the gas in bulk and says the price difference is likely due to how frequently stations refill their gas supply
In cities, stations can be refilled daily, meaning their price of gas quickly reflects market value.
But, in rural areas where stations are filled up weekly or even more infrequently, there can be a sizable lag between what the station is selling gas for and what the market value is.
"In markets where the turnover is slower, dealers are really forced to keep their prices at what they are," said Ervin.
He says that rural prices will soon fall in line with elsewhere once those stations burn through their reserve of weeks-old gas.
"I expect that within a matter of days those markets will change."
With files from Bill Fortier