Nova Scotia

Victoria County seeks relief for struggling gasoline retailers

Officials in Victoria County say gasoline retailers have been hit hard with slumping sales and a 42-cent-a-litre drop in the price of gas in Nova Scotia over the past three weeks.

Northern Cape Breton stations hit with 'double whammy' of low sales, huge drop in price recently

Victoria County officials are asking the Nova Scotia government to help rural gasoline retailers after the 'double whammy' of low sales and a 42-cent-a-litre drop in the price of gas. (Sean Gallup/Getty Images)

The price of gasoline in Nova Scotia has dropped 42 cents a litre over the last three weeks, hitting gas retailers hard.

Officials in Victoria County say that's a special concern in northern Cape Breton.

They say remote retailers are in dire straits financially, while providing an essential service for citizens and emergency personnel.

Oil prices have plummeted globally, triggered by an oil price war between Saudi Arabia and Russia, and fears the spread of COVID-19 could lead to a global recession.

Mike Doucette, owner of the Caper Gas station in Ingonish Beach, said retailers buy large volumes of gas at market price and have to sell it for less when the price drops.

"We have inventory on hand that experienced many price drops ... so it leaves us with product that we have to sell well below cost," he said.

The Nova Scotia Utility and Review Board sets the price of gas on Fridays, but twice in the last three weeks it has used its "interrupter clause" to cut the price mid-week.

UARB drops price

The minimum price in Halifax on March 6 was 105.9 cents per litre, but the UARB used the interrupter clause to drop the price by 10 cents a litre on March 11.

On its regular setting day March 13, the price fell by an additional six cents and four days later dropped another 10 cents.

On March 20, the price went down eight cents more and last Friday it dropped seven cents to 64 cents a litre.

Retailer says gas sales down 90%

Doucette said business is always slow in winter because the region relies on summer tourism, but he said sales are down more than usual because of the provincial state of emergency.

"There's probably 90 per cent less sales now than there were, so it's kind of a double whammy for the small town, rural gas station," he said.

Doucette had to lay off two employees two weeks ago and is running the station himself.

Brandon MacLean, owner of the Irving station in Ingonish, said he, too, has had to cut back on staff and operating hours.

No recovery mechanism

MacLean said it can be frustrating buying a product and not knowing whether you might have to sell it at a loss.

Retailers don't get a break from the regulator when the price drops.

"There is no mechanism for that," he said. "It's the luck of the draw."

In theory, though, losses are supposed to be made up when retailers buy at one price and the regulator increases the sale price, MacLean said.

'I got nailed'

Omar Dixon, owner of the Riverside Resources XTR station in Dingwall, said he had just taken delivery of a load of gas on March 10. Within a week, the price had dropped three times.

"I got nailed," he said.

Still, Dixon said he has not laid off his sole employee and hopes he won't have to.

"I'm trying to hang on as long as I can," he said. "I'm not going to lay off unless it becomes mandatory."

County seeks help

Victoria County Coun. Larry Dauphinee said he's concerned for business owners in northern Cape Breton, especially gas retailers who provide an essential service for residents and emergency services.

However, Dauphinee said he's hopeful government aid for businesses may be available soon for struggling gas retailers.

"There is a little bit of help out there, a little more optimism right now, but we've still got a long ways to go and I guess the big question is how long are we going to be in this situation and can they survive to get out of it?" he said.

Victoria County officials have contacted the province looking for additional help, but have not yet received a response.

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ABOUT THE AUTHOR

Tom Ayers

Reporter/Editor

Tom Ayers has been a reporter and editor for more than 30 years. He has spent the last 17 years covering Cape Breton and Nova Scotia stories. You can reach him at tom.ayers@cbc.ca.

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