Rising gas prices are forcing retailers to decide whether selling gas is worthwhile.
Atlantic Canada VP for the Convenience Industry Council of Canada, Mike Hammoud, says consumers aren’t the only ones who don’t like it when costs go up, “I think the perception out there is that as the price of fuel continues to go up, that retailers are making even more money. We want to make it clear, that they’re not. Nobody wants to see high gas prices. We want to see it go back down, just like any consumer would.”
Hammoud says retailers are currently losing thousands of dollars due to increasing fuel prices,
“Retailers in the province of New Brunswick get a six cent per litre margin on fuel that they purchase because it is regulated. So every time the prices go up the margins go down. Right now, most of them are currently selling at a loss,” Hammoud adds.
He says the dynamics of gasoline retailing have changed dramatically, “The ups and downs of regulated pricing tended to even out over a year. But this year we’ve seen consistent and rapid increases in pricing and there is no relief in sight. With the way that regulated gas prices are calculated retailers are really in a pinch. When the model for gas regulation was developed more than a decade ago, they couldn’t have foreseen the circumstances we are in today.”
During the worst of COVID-19, there were outlets that just closed their doors because they couldn’t survive financially, while some others just stopped selling gas until conditions improved,
Hammoud is concerned that the financial situation of many smaller outlets, particularly those in smaller rural communities, is similar now and not sustainable.
Greg Hooper has been retailing gasoline for many years and operates three sites in the St. Stephen, St. George, and Blacks Harbour area.
“We are getting killed,” says Hooper. “In the past, profitability in gas retailing was dependent on moving volume. I think I sell pretty good volume, but at today’s prices – I’m not covering my costs.”
