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Gas companies balk at talk

The SalmoN Arm Chamber of Commerce found gas prices in Salmon Arm are regularly higher than in surrounding communities.  - Lachlan Labere/Observer
The SalmoN Arm Chamber of Commerce found gas prices in Salmon Arm are regularly higher than in surrounding communities.
— image credit: Lachlan Labere/Observer

Petroleum companies are reluctant to discuss local concerns over fuel pricing, leaving Salmon Arm drivers over a barrel with the highest gas prices in the region.

As of May 8, the price at the pumps in Salmon Arm was 138.9 per litre. Enderby residents were paying 134.9 – the same in Vernon and Mara. It was 136.9 in Sorrento, while Kamloops drivers could pay 130.9, and in Kelowna, 135.9.

Salmon Arm’s typically higher-than-average gas prices are what fuelled the Salmon Arm Chamber of Commerce’s ongoing effort to get some parity at the pump. This has included two surveys, one among chamber owners, the second geared to the general public, about how local gas prices have affected spending habits. The results of the former indicated retailers are losing money. The latter showed drivers are filling up elsewhere when possible and shopping in the process, meaning lost dollars for Salmon Arm.

The chamber and city council had hoped to address this in person with the petroleum companies represented in the city. All were invited by Mayor Nancy Cooper to meet with council and all turned down the offer.

“I think they could have made that offer as a counter-offer, saying we can’t get together and meet with you but we’d be happy to discuss this further with the chamber and council...,” said chamber president Jim Kimmerly.

Cooper called the companies’ response ‘disturbing.’

Though unable and/or unwilling to attend a meeting in Salmon Arm, each of the petroleum company representatives provided written replies.

Shell Canada general manager retail Sydney Kymball said the price is influenced daily by the price of crude oil, the cost of refining and local retail forces. She also notes how retailers in smaller markets need a greater operating margin to generate profit because they are selling less volume.

Some respondents, including Armstrong Regional Co-operative general manager Jeff Payne, said a meeting with council to discuss pricing would violate the conspiracy provisions of Canada’s Competition Act. While other representatives state they already are competitive, Payne notes the Co-op offers patronage to its members that in 2013 translated to a saving of 8.7 cents per litre.

One point Kimmerly picked up from the letters is a shared concept of “competition” that doesn’t synch with his own definition.

“Their idea of being competitive is that we match the price of the other gas stations,” said Kimmerly. “Well, of course here, once the price is set, there’s no other matching that goes on until once the price of gas changes, whenever that is.

“I was in the retail business for 17 years and you never try to play for a tie. You’re always trying to better your competition, attract more customers, which would result in increased sales and profits. But that doesn’t seem to be a factor here. It’s a business model where the petroleum company controls the gas side of the business and the retailer controls the retail store… it’s not a good mix for consumers, that’s for sure.”

Kimmerly says the chamber’s next move is to forward the results of the recent consumer survey to the petroleum companies and their local retailers.

“What comes out of it, we’ll wait and see,” said Kimmerly. “But for the dealer, it must be pretty frustrating to hear, give me $5-worth of gas, because I’m going to Kamloops or Vernon or wherever and I’ll get the rest of my gas there. That must be embarrassing. But that’s what they’re up against.”

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