Here We Go Again!
Yes, yes, I know – complaining about gasoline prices is like mewling about cold weather or the onset of old age. No one likes a complainer.
In this case I believe there is justification in at least revisiting a local inequity that just doesn’t want to go away. In my earlier post I attempted to understand why there should be such a vast difference between the per litre price for gas in Dawson as opposed to Whitehorse. Local lore will always smirkingly reply; “Oh well, that’s the way it is here, we’re always more expensive than Whitehorse!” Why sustain this defeatist and perverse pride of acceptance when we have the ability to make a change?
I’m bringing this issue up again because market observers have said recently that the price of gasoline has stabilized and will follow a flat-line trend well into September. Furthermore, the average price at the pumps in Whitehorse hovers around $1.04 per litre.
I’m assuming that the fuel wholesaler North60 supplies some of the Whitehorse outlets as it does the only gas station within the Dawson town-site which it also happens to own. Yet the per litre price at their gas station here seems to have frozen at around $1.30 per litre regardless of market fluctuations in the real world.
I raise the question, why is this? Is it a business strategy, is it because older more expensive inventory hasn’t been sold or is it to cover off unusually high overhead?
Can we speculate that perhaps we are witnessing a case of opportunistic exploitation of a fortuitous market condition? During music fest weekend I noticed the lineups at the pumps as they filled up for the drive home. I felt sorry for them knowing that there’s a cheaper alternative only a few klicks down the highway.
Consumers have the right to ask retailers about their pricing policies. For them to say “If you don’t like it go elsewhere.” is an unacceptable answer to those of us who raise questions and are trying to improve the cost of living here.
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Fuel opportunists are everywhere in the North and seem to do quite well by it. Even in Whitehorse, the PetroCanada station at Macrae is consistenly 6 cents a liter more than anybody else in town, taking advantage of being either the first or last station you see. Junction 37 has been like that for many years, with the 2 stations juggling to be “gouger-of-the-day” – sometimes within 3 cents of Dawson’s gouger despite being far more accessible that Whitehorse or Dawson. The winner this year, though, is Tetsa River Lodge, with regular gas at $1.68 while 50 miles away in Fort Nelson it was $1.09 (that was in late May).
This brings to mind recent reports of a recent study about price differences between Canada and the US on anything from cars to lipstick.
The market principle of supply and demand has it that price is the place where supply and demand meet. When it concerns lipstick there is no problem. But when it concerns a commodity having a necessity flavour, the weaknesses (for the consumer) of the principle becomes evident. Asking a gas station to lower its retail prices and reduce its profits (or the wages of its employees) is no different than asking health professionals to lower their fees to reduce the public’s cost of health care. If a business sets the price of a necessity by greed rather than need, would a government (municipal?) gas station with gas prices set at the cost of the commodity plus administration be a solution? Would such a proposal draw wide applause in the community, or would it trigger an ideological debate?
First up, gas is not always a necessity, plenty of people live in Dawson and don’t run vehicles or very little. Heating is a necessity, not motor vehicles. Tell me your definition of a necessity as it’s rather different for everybody. Milk and bread, pretty necessary to me?
Secondly, hasn’t history answered this question re the centrally planned, government controlled (read socialist/communist) economy? All attempts by government across the globe to control and/or subsidise fuel prices have consistently ended in failure and exacerbated problems not solved them. If you think service is bad now, wait until you’re being served by a unionized job-for-lifer making $30hr + benefits working for an effective monopoly – please reference current service and costs of phone and power companies of the Yukon. Next thing you know gas stations will be closed on Sun/Mon and Stats like that other govt monopoly, liquor.
Go figure the capital expenditure to run a gas station on Dawson’s teeny volume and meet all the regs/enviro etc, year-round service, -50 or whatever. I doubt it’s small.
There’s plenty enough govt involvement in the Yukon, leave it alone. If you want the best product or service at the lowest price, never go to government or monopolies. That’s my ideological position.
I don’t disagree with you Dawson Activist, my point was simply that, in a market economy without government intervention, price is located at the point where supply meets demand.
The market economy’s price principle applies to housing, health care, and education as much as it does to food, cars, and lipstick. In some countries market economy principles are applied more rigorously than in ours. In such countries that principle applies to health and education with visible results. Some will argue that government invvolvement in services health, education, transportation (public transit), and labour (minimum wage) impedes the market and reduces efficiency (not to be confused with effectiveness). Ultimately, in a democratic society, “we the people” have the responsibility to decide whether, where, why, and to what degree to limit the market philosophy’s price freedom.
Regional consumers have long ago figured out where to go for competitive pricing at the pumps but tourists are often a captive market. They leave our town spreading negative word of mouth after having been ‘dinged’ at the pumps. As witnessed by the Yukon News reporter and others who were incensed by the prices in town during music festival.
This pricing policy of heavily padded margins in some cases can be a detriment to the type of tourism that depends on fuel for their RVs and other recreational vehicles.
Therefore, shouldn’t we be concerned about any condition that negatively impacts tourism rather than blindly protecting the interests of our business community?
Anyone can see that improving the environment for our visitors contributes to the quality of time they spend here. This creates the trickle-down effect of enhancing local commerce overall. It’s a shame that some business owners are not able to grasp this simple concept.
Further, allow me a presumption and let me suggest that the real profit at the pumps isn’t fuel, rather it is the pop, chips, chocolate bars and other junk food that’s sold in the station itself. Remember when every gas station had a couple of bays for fixing flats and doing repairs? Virtually every gas station across the country has abandoned that service and replaced it with a highly profitable convenience store. Talk about hefty margins!
Let me be perfectly clear, I believe in the free market but not an unfettered and unregulated one, especially when it comes to energy.
Look at what just happened on Wall St.
Remember the rolling blackouts in California during the energy crisis of 2001? Look no further than Enron when they got their greedy little hands on a deregulated market in electricity.
No arguments about the conversion of gas stations. Can’t blame the stations for that transformation, the blame (if that is the correct term) for that goes to tire manufacturers.
There is one thing, however, that local organizations (be that Chamber of Commerce or City Council) could do about the kind of gouging you are talking about. A prominent billboard could be set up at the entrance to the town to list the gas stations and their prices. Same sort of idea as some communities practice to list service clubs and churches. It would likely ruffle some feathers, but it would probably be appreciated by visitors who invested their inheritance with Bernie Maddoff.
re gas prices. we seem to be all over the map here. the mayor talks about what happened on wall street. yes, i have heard all about the failure of capitalism. there is an old saying regarding both capitalism/free enterprise and democracy. they are both imperfect systems but they are still the “most perfect” we have. compare the minor failure of wall street with the failed communist economy. the wall street “failure” was a normal part of the business cycle that had not taken place earlier due to the careful planning of experts like alan greenspan the result being that when the normal recession came it came on much stronger. i happen to disagree with all the government bailouts as well, both sides of the border but oh well, thats life. my point, all the problems inherent in capitalism and democracy are nothing compared to the problems we would have if government ran everything.
bigger than all this is the way our mayor has brought this up and how this affects the people in our community. better to talk more to the people you have a problem with on a one to one basis than attack them in the press. i don’t see how the fact that there is a convenience store at the gas station is part of this argument either, it just helps subsidize the gas. i really don’t think sharon and boyd are getting rich from all of this. somebody else want to start a gas station in town and run it they should do it, especially if the really are so public spirited that they want to do it all at cost.
Honestly, judging by some of the reaction one would think I have mortally wounded someone by my comments.
Please, let us get a grip.
All I am saying is that a twenty five cent difference in price per litre between here and Whitehorse is too much.