Business

THE TANK OFFENSIVE

The scavenger hunt for a cheap fill of gas has become the new national sport

KEN MACQUEEN,KARIN MARLEY April 25 2005
Business

THE TANK OFFENSIVE

The scavenger hunt for a cheap fill of gas has become the new national sport

KEN MACQUEEN,KARIN MARLEY April 25 2005

THE TANK OFFENSIVE

The scavenger hunt for a cheap fill of gas has become the new national sport

Business

KEN MACQUEEN

KARIN MARLEY

VANCOUVER LAWYER Joni Worton filled the tank of her beloved Volkswagen Bug on a day last week when the advertised price of regular gasoline topped 105 cents per litre in B.C.’s Lower Mainland. “See, $45!” she said. “It’s crazy for this little car.” At an Esso station in North Vancouver that morning, Bill Newell filled his Acura MDX, a luxury SUV with an expensive taste for mid-range gasoline. The cost: $61.22, at 107.7 cents per litre. That’s rich, but what really rankles the West Vancouver biotechnology executive is the price volatility. The cost of gas can change several times a day on the west coast, often by

five cents a litre or more, he says. Timing gas purchases is an exercise in petroleum speculation. “There’s not a lot of transparency for the consumer as to why today it’s at 107.7 cents here, and next week it’s 115, and the week after maybe it’s 105.”

Neither Newell nor Worton go to heroic lengths to chase down a cheap fill—but others do, sometimes in defiance of logic and economics. As gas prices have risen across this hockey-starved land, the scavenger hunt for cheap gas is becoming a new national sport, played with gusto by people like Gina Balasubramanian, a Winnipeg mother and enthusiastic tipster to gas-tracking website Winnipeggasprices.com. How enthusiastic? Balasubramanian keeps a tape recorder in

her car to record prices that she later posts on the web. “I got into an accident once over gas prices,” she admits. “I was so excited about a price on Pembina Highway, I was reaching for my tape recorder and I rearended somebody.”

Kevin Crowell of Dartmouth, N.S., a coxswain on a Canadian Navy submarine and

ONE price hunter stopped in mid fill-up and crossed to a station that had just lowered its price, to get a trophy receipt

a regular contributor to Halifaxgasprices.com, is willing to drive 35 km out of his way to get a cheaper fill-up—but only after he whips out his calculator to ensure the savings will be worth the trip. He saves about $200 ayear on his gasoline bill, which he calculated last year to the penny: $3,014.21. “Is $200 a whole lot? No,” he concedes. “But it’s $200 in my pocket.” His passion is fuelled by a sense that consumers don’t get a fair shake. “We’re trying to look after ourselves because the government won’t.”

Those who don’t believe that consumption of fossil fuels promotes climate change haven’t spent a buck or more per litre. Near that threshold, the climate grows unsettled: clouds of frustration and anger hover over the pumps, seeded with suspicion that someone, somewhere, somehow is ripping you off. “Crude down $7. Big Oil still GOUGING,” wrote an enraged B.C. correspondent to GasTips.com last Wednesday.

Adding to the annoyance is a bad case of regional price envy. In the Toronto area that day, you could fill up for as little as 81.5 cents a litre at a PetroCanada in suburban Scarborough. In Calgary and Ottawa, prices ranged from the lowto mid-80s. Halifax and Montreal stations were in the mid-90s. But even Ottawa’s relatively low prices didn’t placate Lawrence Ukrintz, a price hunter so competitive he once shut off the nozzle in the middle of a fill-up and crossed the street to a station that had just lowered its price, just to get the receipt as a trophy. He’s semi-retired and treats the chase as a fullcontact sport played against a stacked team of tax-hungry governments and greedy oil companies. “I know that there’s collusion in the business,” he says. “I’ve been in buying gas and the attendant’s been on the phone describing to his boss what all his competitors’ prices were.”

Collusion is a harsh, legally loaded word. Oil companies prefer the term “competitive

pricing.” Since 1990, the federal Competition Bureau has launched five investigations into rising costs of gas, without detecting malfeasance. “We found no evidence to suggest a national conspiracy by gasoline companies to coordinate price increases,” says commissioner Sheridan Scott. The latest report, into the price spike a year ago, was released March 31. It found that pre-tax prices in Canada during that time were lower than those in most industrialized countries, including the U.S. The retail price, the bureau concluded, was a “response to normal market forces.”

And those forces, gasoline retailers say, are brutal. “People will cross the street to save two-tenths of a cent on a litre of gasoline,” says Deidre Reid, a spokesperson for Chevron, which has 167 stations in B.C. Many companies have instituted loyalty cards in some provinces that give regular customers discounts. Chevron’s approach has been counter-intuitive: its retailers chop 3.5 cents a litre at the pump for everyone. As a result, street signs at some stations last week offered gas at the scary price of 105.2 cents a litre, while the real cost at the pump was 101.5. The company believes such surprise savings can leave customers grateful that they got a deal. As well, the higher posted price lets drivers make “apples-to-apples” comparisons with competitors that rely on loyalty cards, Reid says. “Our customers are typically shopping at about 60 km an hour when they make their pricing decisions.”

There’s something about gas that makes consumers especially price-conscious. People choose a station based on a fractional price difference that may save 10 cents or 20 cents, says Ted Stoner, Calgary-based vice-president of the Canadian Petroleum Products Institute, whose members represent 80 per cent of Canada’s refining capacity and supply 10,000 stations. The same people will then walk into the station store and pay $1.75 for a 400-ml bottle of water. “If they sat back and thought about it,” he says, “they’d see, ‘Here’s this water, which I’m buying without price-shopping, and yet it’s probably worth 2V2 times the price of the fuel I just bought.’ ”

Oil industry logic is no less mystifying, and can fan public cynicism. For instance, gas is selling below 80 cents a litre during a raging price war in Chilliwack, an hour’s drive east of Vancouver. Such bargains heighten suspicions that companies must be

GAS PRICE ENVY

Why are some Canadian drivers hurting more than others? Blame tax. Aside from federal excise tax and GST, gasoline is hit with varying provincial sales taxes and fuel taxes that range from 6.2 cents a litre in the Yukon to 19.5 cents in P.E.I.

Whitehorse

Victoria

Vancouver

St. John’s

Quebec City

Halifax

Montreal

Winnipeg

Ottawa

Calgary

Toronto

Canada Average

♦Average

price

104.9

102.9 102.6

98.9

96.4

95.9 94.1

88.9

87.7

86.8 84.6

90.4

♦♦Tax

portion

23.1

33.7

37.2 39.4

37.8

38.0

39.0

27.3

30.4 24.7 30.2

32.5

♦AVERAGE CENTS/LITRE FOR REGULAR GASOLINE ♦♦PORTION OF PRICE (IN CENTS/LITRE) THAT GOES TO TAXES

SOURCE: MJ ERVIN & ASSOCIATES INC. PRICES AS OF WEEK ENDING APRIL 12.

reaping obscene profits everywhere else. In reality, Stoner says, Chilliwack drivers are buying gas below the wholesale cost, as major chains fight for market share. “Which,” he concedes, “makes no sense.”

If anyone reaps a windfall for high gas prices, it’s the tax man, says Stoner. In March, the average national cost of a litre was 88.5 cents. Of that, more than 32 cents went to federal and provincial taxes. Then, at least three urban areas—Greater Vancouver, Victoria and Montreal—piled on a levy to help finance regional transit systems. Still, when consumers get mad, they take it out on the retailers. Stoner concedes there is “anecdotal evidence” that gas thefts increase as prices rise. “I’ve seen people siphoning from others’ cars and I’ve seen drive-aways [without paying],” says customer Crowell. “It’s not common, but it’s becoming more so.” There was hope of relief from gas pains last week, as crude prices headed down. But that won’t stop the committed bargain hunters from holding Big Oil to account. For them, happiness is an open road, an empty tank, and the cheapest gas in town, just ahead on the right. fi1]