It is not uncommon for the price of gasoline to jump as a long holiday approaches, such as Thanksgiving. However, it is in Saguenay-Lac-Saint-Jean that the increase is the most notable, with a jump of 20 cents on Thursday.
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The price at the pump went from $1.48 per liter to $1.69 within hours in some areas.
The decision to raise the price of gasoline was taken by leaders of the Organization of the Petroleum Exporting Countries (OPEC) on Wednesday. They chose to reduce production quotas by 2 million barrels per day, a decision that is being felt at the pump.
“It is with the aim of reducing the supply on the market, because in recent months the price of oil has nevertheless fallen a lot. We went from $120-130 and maybe went down to $75-76 a barrel. For them, it had become much too low. They wanted to “stop” that, so we cut production, we increase prices,” explained Éric Dionne, manager of the Facebook page Essence SagLac.
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The margin taken at retail was either very thin or negative since the beginning of the week in the region, hence the greater increase in Saguenay-Lac-Saint-Jean.
“We were really paying under the right price for a few days, especially in Chicoutimi and Jonquière. As soon as we went out to Lac-Saint-Jean, it was $1.54. It did not go down to $1.46 as we had the luck in Chicoutimi and Jonquière. The cost of the acquisition having increased, they adjusted,” noted Mr. Dionne.
Add to that inflation, the exchange rate and the war in Ukraine.
“The war in Ukraine is really directly related to the latest hikes. The speculators are very nervous and very tense, there is a lot of speculation. There is also the refining margin which has gone up. It’s always more everywhere, so it’s the consumer who pays in the end,” continued Mr. Dionne.
While most gas stations post an average price of $1.59 per liter in Jonquière, others post prices of $1.69 per liter just a few blocks away.
“You really have to avoid the Couche-Tard banners, because in the region, for several months, they are the ones who are known to start the ball rolling for increases and often they increase by 10-12 cents more than the cost of acquisition”, observed Éric Dionne.
But the current increases are not exaggerated, according to CAA Quebec. In Saguenay-Lac-Saint-Jean, the average price at the pump (156.1 c) is still lower than the realistic price (169.0 c).
“Couche-Tard still respects that price, they didn’t overdo it, but many details have chosen to increase only to catch up with the cost of the acquisition. Chicoutimi-Jonquière sector, competition is strong,” he added.
Due to the drop in production, the price of gasoline could rise further in the coming days.