N.B. gas stations protest fixed prices
Approximately 90New Brunswick gas retailers began welcoming customers at midday Tuesday afterclosing for ahalf dayto pressure the government into raising the regulated pump price above $1.12 per litre.
Kevin McCann, New Brunswick sales manager for Wilson Fuel Co. Ltd., says small rural gas stations with high distribution costs can't make money under a fixed-price system, andare being squeezed out of the market.
"The New Brunswick government didn't really take the time to sit down with the stakeholders to find out how the industry functions," he said.
McCann saysthe regulated price is forcing them to operate at a loss because they have signed multi-year contracts with their wholesale suppliers.
The protest included gas stations owned by Wilson Fuels, along with Shell, Ultramar and Petro-Canada stations. New Brunswick is home to approximately 780 gas stations.
The New Brunswick Public Utilities Board, which began regulating gas prices on July 1, is scheduled to set a new price for gasoline on Wednesday.
Province could help renegotiate contracts
Energy Minister Brenda Fowlie says the pump price is designed to help retailers make money, but says she's heard the complaints andthat the problem lies with the wholesale purchase agreements.
She's willing to help gas station owners renegotiate their long-term wholesale purchase contracts to help them turn a profit in New Brunswick's regulated gasoline market, she said.
"The problem is for some of the retailers, they are locked in long-term contracts with specific wholesalers," she said.
Provisions exist in Nova Scotia to renegotiate those agreements, and New Brunswick would consider adopting similar rules, she said.
That could be good news for Patsy Murphy, who owns an independent gas station in Port Elgin. She has a multi-year contract with a major gas company.
"It would definitely be a positive because we would be able to shop around, and maybe get a better deal," she said, "but I think all companies are pretty much the same."
Murphy would prefer the province follow Nova Scotia's guidelines, whichguarantee retailersbetweenfour and 5.5 cents in profits per litre. Fowlie says that won't happen in New Brunswick, because it's bad for consumers.
Another solution: wheeling and dealing
But at least one independent gas station owner in the province said he's still making money and wouldn't be part of Tuesday's protest.
Ted Ayles owns the Rite Stop in Lakeville, near Moncton, and is selling his fuel 1.5 cents below the regulated price.
Ayles says it's harder to make a profit in the new era of regulated gas prices, but not impossible.
"You have to be independent," he said."Pay for it in cash, cut deals."
Ayles has been in the business for 32 years, and says wholesalers will respond to wheeling and dealing. He makes it happen by selling a lot of gas well below the prices advertised by his competitors.
Ayles says other station owners, particularly those affiliated with major gas companies, have less room to negotiate.
His consistently low prices have won him loyal customers, including Marion Carscadden, who often stops by to gas up on her way to her summer cottage. She says the pennies add up.
"There's a lot of people from everywhere that will take the extra time to come here to get the gas," Carscadden said.
She says other station owners should follow the same example. "It's a little strange why he can do it, and the rest of them can't."