Discussions

Kirmit said "My line is drawn at fairness. For some, it appears that can be a challenging concept. For others, it's just paying an amount that is competitive and in line with the communities outside of Brandon who are subject to the same tax structures as the generous folks in Brandon.     Is that too much to ask? Apparently, some in Brandon's business community think so. "

What do you think happens when one station is 1/c a liter cheaper then the rest when that gas station is only a 10 minute drive away? Do you think there is some sort of magical recipe in market dynamics that will result in multiple stations being different prices in such a small trade area? You're chasing ghosts.  
 
Edited by Opportunities Abound, 2017-12-26 21:02:13

Johnbisonbear said "the price of gas goes up, right before the holidays, not just at Christmas, like a cash grab.   No different than the price of groceries, etc. that need to be bought before Christmas, that's a cash grab too!   It's all about the money folks! "

http://www.kentgroupltd.com/holiday-weekends-and-fuel-price-increases-fact-or-myth/  
 
"Kent Group Ltd provides excellence in data, analytics and consulting services relating to the downstream (refining and fuels marketing/retailing) petroleum industry."  
 
Kent Group Ltd.  
367 Princess Ave.  
London, Ontario  
N6B 2A7  
Canada

Kirmit said "My line is drawn at fairness. For some, it appears that can be a challenging concept. For others, it's just paying an amount that is competitive and in line with the communities outside of Brandon who are subject to the same tax structures as the generous folks in Brandon.     Is that too much to ask? Apparently, some in Brandon's business community think so. "

Build a station, operate it at the same price as Winnipeg and call it a day then. How about that?

One of the things that I find to be very interesting, are the strategies that the business community uses to increase profits.  
 
For instance, it would appear that oil and gas companies are actually likely better off now than before the financial crisis in 2008, or before the drop in the cost of oil in 2014.  
 
The ones that are really hurting after these events are the consumers, and consumers through their governments.  
 
For instance, just look at the following article and pay particular attention to the graph on royalties paid over the past 40 years.  
 
http://www.cbc.ca/news/business/alberta-royalty-oilpatch-oilsands-1.3905075  
 
Since about 2010, the Alberta government collects less in royalties on oil and gas, since a period going back to the late 1970''s. After the financial crash in 2008, government royalties on the extraction of a publicly owned resource, has completely tanked.  
 
In my experience, many people are not very good at reading and interpreting graphs. Pay attention to the trends on the light brown vs the yellow, vs the black. The light brown (representing gas) are at an all time low. The yellow (representing oil) is at an all time low. The price of bitumen is - on relative terms - higher but mostly because the industry is having a difficult time getting product to market and the price of bitumen is - on relative terms to other forms of oil - high.  
 
So why is it, that these companies have allowed, in this case the Government of Alberta, to basically give up the collection of most of the royalty monies from these resources, and yet the price at the pump remains the same over all this period. What has happened is that the profits have been redirected from the public purse, to private interests. And when profits from a public resource are eliminated, the government goes into massive debt, which is either bailed out by the hard working public taxpayer, or the increased debt results in massive cuts to public services. In both cases, the public suffers while the business community walks away with all the profits, and socialises all of the debt. Where have we seen this before? Could it be in 2008 with the bailout of the massive banks, insurance companies, car manufacturing companies, and more recently with Bombardier (in Quebec)? Ever wonder why the tax money that is supposed to be collected to pay for government services, ends up in the pockets of subsidised private corporations? In fact, the Bombardier government bailout has now taken that company and made the cost of their product (the C-series airplane) incur a duty fee of 300% in the US market. Why do we allow public tax dollars to the tune of $1 billion dollars, with a good portion of that going to a few corporate executives?  
 
https://globalnews.ca/news/3354398/bombardier-trudeau-hammered/  
 
And somebody who questions this, is now being challenged as being unreasonable?  
 
Edited by Kirmit, 2017-12-26 21:18:28

Opportunities Abound said "    Kirmit said "My line is drawn at fairness. For some, it appears that can be a challenging concept. For others, it's just paying an amount that is competitive and in line with the communities outside of Brandon who are subject to the same tax structures as the generous folks in Brandon.     Is that too much to ask? Apparently, some in Brandon's business community think so. " Build a station, operate it at the same price as Winnipeg and call it a day then. How about that? "

Can I Ask You A Question?  
 
Do you either  
 
(1) own a gas station, or,  
(2) work or earn a living in the oil and gas industry?  
 
That's a fair question to put some context to this discussion. No?

Do you believe all the bogus gas prices that are being posted here.  
All these amazing stories of 10 cents cheaper here and 94.7 cents there, a quick check on GasBuddy has shown those all wrong.  
 
We have had gas prices that are lower than the national average for years.  
 
Your chasing a dead horse.  
 
No I don’t work for a gas company.

loeog said "Do you believe all the bogus gas prices that are being posted here.   All these amazing stories of 10 cents cheaper here and 94.7 cents there, a quick check on GasBuddy has shown those all wrong.     We have had gas prices that are lower than the national average for years.     Your chasing a dead horse.     No I don’t work for a gas company. "

Do you own a gas station, or work for a company whose income relies on the business dealings of the oil and gas industry?  
 
FYI: Everybody knows that Brandon prices are on average about 10 cents more than Winnipeg. It has been a regular topic of discussion here on eBrandon for years. And I'm not the one who started it, but I do agree with it.  
 
And just so you know, I just did a search on gasbuddy.com about one minute ago, and the average price in Brandon currently sits at 112.9 cents per litre, and the average price in Winnipeg currently sits at 103.9 cents per litre ... so your comments are not factual, with a current price discrepancy of 9 cents per litre which is the topic of discussion here.  
 
I will upload screenshots to the eBrandon site showing each respective price.

I have no problem paying 10 cents a litre more than Winnipeg. Brandon is a much smaller city and it costs far less to drive from one end of the city to the other. It costs a lot more to drive to destinations in Winnipeg than it does in Brandon because it is much bigger. So, as a result, I have no problem paying 10% more since Brandon is so small. I’m far from being rich.

We seem to believe that there are great differences in prices across Canada, but if we start with the rack price across Canada the differences are not that great. The rack price is the price paid for wholesale fuel, and does not include freight ot taxes for the province or a local location.  
 
I'm going to include a link so that people can see what these rack prices are, Hope it works.  
 
https://www.petro-canada.ca/en/rack-pricing/daily-rack-pricing.aspx  
 
Because each province has it's own taxes on fuel, and the distances to retail outlets can vary the prices at locations will vary. When I look at rack prices and compare them to the affluence of an area, I still get the feeling that certain areas will pay more because of this factor. We do have cheaper fuel than many places in the country, but where does the province stand on the economic ladder.

don brown said "We seem to believe that there are great differences in prices across Canada, but if we start with the rack price across Canada the differences are not that great. The rack price is the price paid for wholesale fuel, and does not include freight ot taxes for the province or a local location.     I'm going to include a link so that people can see what these rack prices are, Hope it works.     https://www.petro-canada.ca/en/rack-pricing/daily-rack-pricing.aspx     Because each province has it's own taxes on fuel, and the distances to retail outlets can vary the prices at locations will vary. When I look at rack prices and compare them to the affluence of an area, I still get the feeling that certain areas will pay more because of this factor. We do have cheaper fuel than many places in the country, but where does the province stand on the economic ladder. "

After being a retail and bulk fuel agent for twenty five years some posts amaze me. The term "a little bit of knowledge, can be a dangerous thing" comes to mind.

oil goes up, the price of gas goes down by five cents a litre. How does that make sense?

Johnbisonbear said "oil goes up, the price of gas goes down by five cents a litre. How does that make sense? "

At times. I think they may have inflated price at the pumps for the holiday season. Now tgat tge season is over they re-adjust perhaps the price for what it shoukd be with still a healthy margin.

70`s guy said "    Johnbisonbear said "oil goes up, the price of gas goes down by five cents a litre. How does that make sense? " At times. I think they may have inflated price at the pumps for the holiday season. Now tgat tge season is over they re-adjust perhaps the price for what it shoukd be with still a healthy margin. "

the stations will always have a 'healthy margin' in order to pay their associated costs and have profit to boot

So, because Brandon is smaller than Winnipeg it’s ok to charge more? This has to vector dumbest thing I ever heard. Omg this kind of argumentation makes me downright angry.

Remember a little bit of knowledge can be dangerous, after tlr made that I comment thought to myself, "so, let's see what I can find, let the research begin".  
 
First link  
 
http://www.cbc.ca/beta/news/business/gas-prices-unravelling-the-mystery-of-what-you-pay-at-the-pump-1.2955763  
 
An article that tries to explain the price of gasoline, there is one part that I would challenge in the article, and that is the freight costs of 22 cents per litre for delivery after it leaves the rack, maybe they made a mistake, but at 22 cents no retailer would be making money. Read the link to get the costs to the fuel rack, which is a starting point for comparing fuel prices, not only locally but across the country.  
 
Second link  
 
https://www.petro-canada.ca/en/rack-pricing/daily-rack-pricing.aspx  
 
This link is pretty simple, it gets us to the starting price right here in Manitoba.  
 
Third link  
 
https://en.m.wikipedia.org/wiki/Motor_fuel_taxes_in_Canada  
 
This link includes all taxes as well as some intercity taxes, as in Vancouver.  
 
Please take time to read these links, I'll be back later in the day with some of the other things I have found since beginning my little quest for a bit more knowledge.  
 
Final thought; To tlr, as a retail dealer and a bulk fuel agent I look forward to any clarification on any information presented.

Discussion is about Brandon. I'm sure you will get lots of info off Google. Google answers work well for the expert. Prices are set by the parent company, usually as high as the traffic will bare. Rack pricing and taxes has nothing to do with it.

I have one question, if rack prices, taxes, transportation, and retailer margin, have nothing to do with the price in Brandon, would that not indicate collusion?

Is set by his supplier, what he or she sells it for is up to them. Margin is the difference between retailers purchase price, and selling price. Retailer will sell for as much as margin as he can, without being over priced in his particular market. Taxes are about the only thing that is constant through out MB. Not rocket science, as the retailer tries to keep his margin high enough to make a return on his investment. Margins are different at different times of the year as prices fluctuate.

I have been working on this for over a week now so do have a few bits more information to include with links, and also numbers to show how when there is competition prices do work. I understand that to stay in business one does have to have a profit, and when talking of Brandon prices compared to Winnipeg we can see competition compared to no competition, and that includes those who are fully in dependants, will go into that later after done work for the day.  
tlr, in a way your comment does support the idea that if people did not patronize certain retail outlets, especially when there prices are at the extremes, competition should ensue brining margins down. There are those who can afford to lose market share because in some areas they use fuel as a lost leader, but there also those who cannot lose market share.

You can make it sound as complicated as you wish, but that won't change the facts. Google can be a wonderful tool for someone that has no knowledge of a particular topic. Nothing like first hand experience trumping what you read, or heard. Stating the obvious can sometimes tell a lot about ones understanding on a given topic. Good luck on your quest to school me on a topic, I lived for twenty five years. No disrespect intended.

I have never been in the retail gas business but was in the auto repair field for over 40 yrs. one thing I learned during that time was that if you can’t make a profit you had better get out and find another occupation.  
Today with the rack price of 70.1 cents in Regina and a pump price of 112.9 there is a gross margin of 13.42 cents per litre.  
From this 13.42 cents the station has to pay trucking costs, overhead costs, labor costs etc. You need to pump in excess of 200 litres per hour just to pay one employee minimum wage. This doesn’t leave very much for the owner.  
I’m sure glad that I’m not in that business.  
tlr are my figures in line with your thinking

They are not getting rich by any stretch of any ones imagination. Tough business to make a go at.

The link I'm going to post was written a few years back and some of the numbers presented were from reports in 2004, but this report has been edited and the last date for editing was in 2016. The editing now included the new played in the game, which have played an important difference to the retail fuel market.  
 
https://www.nrcan.gc.ca/energy/crude-petroleum/5897  
 
Government report but there may be those who would refere to it as fake news, but I sort of accept it as a good and detailed report on the fuel industry, in other words a worthwhile read.  
When these new players showed up on a slightly larger scale they were critized as all selling gasoline as a lost leader, and even myself have posted that idea. Now if we look at the price structure from the first link I provided, going from rack price to consumer price, and not using a transportation cost of 22 cents a litre, but a cost of .02 cents per litre, the new players are selling fuel at nearly the price they should.  
 
tlr, you have made two comments, one was the company sets the price, the second is local retailers set the margin, and this is done to make it profitable, maybe not only for the retailer, but also for the parent company, this was discussed between you and Larry Robbins, and also how close margins were and how if you didn't make money a person should get out of the business.  
 
During any of the research I've done I've had to use gasbuddy, really not my favorite choice because they do seem to have a bias. Now a person shouldn't maybe make a claim unless they are willing to back it up.  
So here goes. When Costco started selling gasoline in British Columbia at a big discount, gasbuddy was one of the first to claim it was a lost leader tactic, and was not going to be tolerated by the big companies, also when comparing gas prices here in Manitoba I noticed a list of many if not all areas, right from Alexander to Woodnorth. Now the strange part was the omission of Trehern, why the omission of Trehern.  
During the reading of the above link there were things that we all saw happen, they happened in Souris, Brandon and most other areas, what I'm talking of is the closing of retail outlets, they were likely closed because traffic flow made them unprofitable.  
Now back to Trehern, gasbuddy, profitability, and history. Had to mention history to maybe bring into a longer timeline than 25 years.  
Ok on to the point. In 1974 we had to make a weekly trip into Winnipeg for a six week period. First trip we filled in Souris and followed hiway #2 into Winnipeg on our way to visit my day in hospital. The price we paid in Souris was 71.9 cents a gallon, and on our way we kept track of prices, the price in Trehern that summer was 68.9 cents a gallon, which was the same price as Winnipeg, except for on weekend where Winnipeg had a price war, that price war resulted in a 64 cent price, but all the rest of the time Trehern was same price as Winnipeg. Now for gasbuddy, although they don't have Trehern in there list of Manitoba towns, you can find it by gasbuddy Trehern, price this morning was 103.9, not really a surprise.  
So with all the talk about company price, margins, transportation, and return to the owner/ operator of a gasoline outlet, we have an Esso station in a rural area selling fuel at Winnipeg prices, and they have been doing it for over 44 years.  
 
There have been changes in retail gas, somewhat hard to explain how a station has Ben selling gasoline at winnipeg prices and even today was competative with the new players in the game.

Tried to edit a number in my comment but came back as an error, the one number that should be one the transportation cost, stated .02 cents per litre, should have read 2 cents per litre.

Anyone with a calculator and a link to the rack price can figure out the margins.  
Rack price + Fed Tax + Prov Tax = true net cost at the rack facility.  
Pump price - GST = selling price.  
Profit is the difference minus trucking and all other costs of the station.  
If someone wants to sell for less than cost do be it. That should make us all happy because it is “competition”.  
Don there is only one “B” in Robins.

Sorry for the extra B, spelled it with one then second guessed myself, always seems to end up a mistake when one does that.  
In not going to use costco or superstore prices, but if a person takes the price of 103.9, which seemed the average in Winnipeg yesterday, and takes the GST off that and like you said works with rack price and taxes you come up with margin. We had a jump in rack prices overnight, but before that we were working with a rack price in Winnipeg of 68.8 cents per litre, and government taxes are 24 cents here in Manitoba, so that works out to 93 cents per litre. The freight rates I used are common rates that I have been quoted, 5.75 per loaded mile, or less depending how busy everyone is, if I use a distance of 150 miles for freight and a 50,000 litre load we come out to around 2 cents per litre dilivered to Brandon for the freight part of it. That does mean that at 1.03 they are running right on the line in Brandon. Now looking at Winnipeg you would be looking at much lower freight costs, so at 103.9 there is a bit of margin. Yes it's tight, but look at all business.  
There are still the unknowns, like restocking times, which indicate volume of sales, but when prices are held at a higher price for an extended period of time the picture changes quickly.

Gas is down to 103.9 at Husky if you're looking for cheaper gas today most are still 111.9

in the pas so idk if freight is actually a factor in why brandon seems to overcharge all the time.