‘Gas war’ sees prices plunge to lowest in Ontario

There’s a war going on in St. Thomas and it’s all to do with gas prices. On Tuesday a “gas war” broke out that saw prices plunge to 86.9 cents per litre at most gas stations in the city.

“It’s likely that one or two decided they wanted a little bit more volume, a little bit more activity, may have some support from their refiner, who may very well own them, or their wholesaler, but the reality here is that we’re looking at a classic example of a gas price war,” said Dan McTeague, senior petroleum analyst with GasBuddy.com - writes ifpress.

The Canadian Tire gas station was behind the price, aiming to lower it for a customer appreciation day. That prompted other stations in St. Thomas to also lower their prices in an effort to compete.

McTeague said the low prices aren’t sustainable and will be heading back up soon.

“Pioneer, Ultramar, Refuel, Shell – all of these stations are selling gasoline at about five or six cents a litre below what it costs them to buy,” McTeague said.

The prices were still lower than normal as of Wednesday afternoon with most gas stations maintaining a price in the range of 92 to 94.5 cents per litre.

McTeague said the gas stations must find a way to cross subsidize the low prices with other things they sell or have what’s known as dealer support, which means the refiner or supplier says to match whatever the lowest price is just to keep up the volume of customers.

Cheryl Barash was filling up her tank at the Refuel station on Wednesday morning and said she was surprised to see prices go back up so quickly.

“We were in town yesterday and it was 86 (cents per litre). And then I came in today and it’s crazy,” Barash said.

Barash put $20 worth of gas at Canadian Tire, which was at 108.7 cents per litre before someone told her that Refuel was selling for 92.4 cents per litre.

“I put $20 at Canadian Tire and then I came over here (Refuel) to fill up the rest of my tank.”

The lowest price in London as of Wednesday afternoon was at Costco for 99.9 cents per litre.

Read other business news on the city site of London.

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