Dawson City gas stations ‘gouging’ customers

Dawson City’s gas stations are “unconscionably gouging” their customers, said Mayor John Steins. Gas in Dawson is selling for 23 cents more than in Whitehorse, making these the highest gas prices of any Yukon community.

Dawson City’s gas stations are “unconscionably gouging” their customers, said Mayor John Steins.

Gas in Dawson is selling for 23 cents more than in Whitehorse, making these the highest gas prices of any Yukon community.

Over the weekend, Dawson City’s downtown Shell station sold fuel at $1.30 per litre.

Meanwhile, stations in Whitehorse sold fuel at $1.01 per litre.

“Obviously, $1.30 (per litre) is excessive,” said Steins.

“I don’t know what you’re supposed to do, stand there with a gun and threaten them? — it’s ridiculous” he said.

In January, Dawson gas stations justified their high prices by saying that they were still selling off “expensive” gas purchased before the post-recession drop in fuel prices.

“We still have the old gas, so unless we sell it at a loss, we can’t match the prices in Whitehorse,” an employee of Dawson City gas and tire told the News, at the time.

Six months later, Dawson gas stations have all filled up with low-priced post-recession gas, but their prices remain sky-high.

The difference comes from “freight,” said a representative of Dawson City’s Fischer Fuels.

Dawson’s fuel prices typically hover at about 15 to 30 cents higher than those in Whitehorse.

Even at 15 cents, that means that for every 37,500-litre tanker truck, “freight” would be costing $5,500.

During the winter, when Dawson service stations were charging 47 cents more per litre than in Whitehorse, a premium of $17,625 would be attributed to “freight.”

MacKenzie Petroleum charges $10 per “one-way mile” to ship fuel.

A tanker truck to Dawson, therefore, would only cost about $3,300.

Smith Fuel Services, based in Fort St. John, BC, estimates it would cost only about $2,500 to ship a tanker from Whitehorse to Dawson, a sum equal to about 5.5 cents extra per litre.

Per-kilometre, Dawson gas stations don’t pay any premium for North 60 fuel, said Sharon Ness, president of North 60 Petroleum limited.

You’d have to ask the gas stations why prices are so high, she said.

“I won’t disclose what we pay (for freight),” said the Fischer Fuels representative.

It’s more expensive to operate a gas station in Dawson City, said Don Frizzell with MacKenzie Petroleum.

“Their power costs more and their labour costs more, and their volumes are lower, so they need a higher margin, but I don’t know if it’s justified or not,” said Frizzell.

MacKenzie operates a cardlock in Dawson, but otherwise doesn’t provide fuel to service stations.

Lower sales volumes may also be prompting the price spread.

“(Dawson) service stations have to provide a service all-year round, none of them close for the winter, and they’ve really only got an audience there for three months,” said Frizzell.

“Whatever money you’re going to earn in three months is going to carry you through the rest of the year,” he said.

Gas stations in Beaver Creek and Destruction Bay face similar challenges, but manage to keep their prices more than 10 cents lower than in Dawson.

For June, Beaver Creek was charging $1.17 a litre, Destruction Bay was charging $1.16.9.

Contact Tristin Hopper at

tristinh@yukon-news.com

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