Gas hikes in N.L. aren't curbing auto sales
Last Updated: Thursday, June 19, 2008 | 8:28 AM NT
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Newfoundland and Labrador consumers faced higher prices Thursday for all grades of gasoline. (CBC) Newfoundland and Labrador's fuel regulator raised gasoline prices again early Thursday, although the series of increases seems to be having little impact on vehicle sales.
The Petroleum Pricing Office raised the maximum price for all grades of gas by 4.4 cents or 4.5 cents a litre, depending on rounding for taxes in various areas of the province.
Thursday's hikes mean, for instance, that retailers in the St. John's area, where gas is cheapest, can charge no more than $1.467 for each litre of unleaded self-serve gasoline they sell. Prices vary around the province to account for transportation and other costs.
Gasoline prices in Newfoundland and Labrador are higher by about 28 cents a litre than at this time last year, and by about 20 cents a litre compared with three months ago.
The latest price setting moves close to the $1.481 record set in September 2005, when fuel prices briefly spiralled in response to the fallout from Hurricane Katrina.
Mounting gas prices, though, have not dragged down business at car dealerships.
Earlier this week, Statistics Canada reported that nationwide vehicle sales declined in April. Newfoundland and Labrador was one of three provinces to buck the trend and report gains, keeping up a streak of robust car sales throughout the most recent climb in gas prices.
"It's like the old thing with cigarettes and beer," said Mick Kennedy, a sales representative at Labrador Motors in Happy Valley-Goose Bay.
"If you want it, you're going to pay for it. And that seems to be the way it is."
Several causes have been suggested for the steady business at car lots, from the impact of the offshore oil industry to the disposable income of skilled workers who commute to high-paying jobs in Alberta's oil patch.
Indeed, the vehicles that have been selling fastest are those — large trucks and sports utility vehicles — that drain gasoline quickest.
"The demand is a lot higher for our availability on our trucks and SUVs — our small SUVs, anyway," said Trevor Bradley of the Toyota Plaza dealership in St. John's.
"We're having lots of sales and difficulty getting enough product to satisfy the demand here anyway. You know, … they need them."
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