Higher Kamloops fuel prices tied to bio-fuel supply

KAMLOOPS — Over the past weeks, Kamloops residents may have noticed that fuel prices in surrounding communities have been drooping while the local price has remained steady. In the Lower Mainland, some gas stations are selling unleaded gasoline at $1.55 per litre, while closer to home in Salmon Arm, prices are at $1.57 per litre.

Currently in Kamloops, most stations are selling fuel close to the $1.75 mark.

According to a petroleum expert, the stark difference in prices between Kamloops and other B.C. communities comes down to the supply of bio-fuels and when individual wholesalers purchased their last shipment.

“I don’t have perfect details — nobody knows, only the companies know the details. Let me put an example, this is me doing some guess work on what could have possibly happened. If I’m a wholesaler in Salmon Arm, I secured supply or may have inventory levels ahead of time. But, in Kamloops I may have missed the boat, I might not have adequate inventory levels to manage demand. Then I have to go buy fresh stocks of bio-fuels and that affects my margins,” said Vijay Muralidharan, Director with R Cube Economic Consulting.

The current increase in the prices of bio-fuels is tied to American companies buying up supply at the end of the calendar year to appease government standards.

The fuel price market works on a supply-and-demand delay, with prices usually falling or rising weeks or even months after a change in the market. That delay is expected to catch up with the prices in British Columbia in the coming weeks.

“It has already gone for about 20 days, so you will see some kind of reprieve in the next week or two. You will see some pull back in pricing because traditionally, what we’ve seen in past data is that it takes about three to four weeks for the dust to settle,” added Muralidharan.