Mayor challenges gas prices

Dawson City residents are paying too much for gas, says Mayor John Steins. In the Klondike, the price of gas has been almost 50 cents higher per litre than Whitehorse in 2009. That's an "unacceptable" difference, said Stein.

Dawson City residents are paying too much for gas, says Mayor John Steins.

In the Klondike, the price of gas has been almost 50 cents higher per litre than Whitehorse in 2009.

That’s an “unacceptable” difference, said Steins in an interview.

When Whitehorse pump prices were 84 cents a litre, Dawson City’s were at $1.31—a difference of 47 cents, noted Steins in his January 11 blog entry.

Multiplying the 47 cents by the 37,500 litres that a typical tanker truck hauls into Dawson, each truck can generate a $17,625 premium, he said.

“How’s that for a windfall profit for a shipping distance of only 300 miles?” wrote Steins.

With low sales volumes, Dawson’s gas retailers say they are still selling off “expensive” gas purchased before the price drop.

“You buy 40,000 litres, and then the price drops everywhere, but you’re still running the expensive fuel,” said Joe McIntyre, manager of Dawson City’s Mackenzie Petroleum, where gas is $1.05 a litre.

Dawson City Gas and Tire sells barely one tanker load over the winter, and they bought their supplies in November, when average Canadian gas prices were between 90 cents and $1 .

“We still have the old gas, so unless we sell it at a loss, we can’t match the prices in Whitehorse,” said an employee.

“You can’t just give away 40 cents a litre on the stuff you’ve already paid for,” said McIntyre.

At Eagle Plains, which is twice as far north as Dawson from Whitehorse, gas was $1.25 a litre on Thursday.

“We have to take on 40,000 litres of fuel at a time,” said Eagle Plains manager Stan McNevin.

“We get that in at a higher price, and I can’t reduce that price until I’ve gotten rid of that fuel and brought in another tanker load of 40,000,” he said.

“I can’t instantly adapt to market rates, or else I would be losing money each time the price dropped to a lower level.”

The reverse would also be true. If gas prices suddenly skyrocketed, Eagle Plains would hold fast at the price line of the original shipment, said McNevin.

“We’ll generally hold our price line until we’re forced into a situation where we have to change it,” he said.

Dawson gas stations, by their location and lack of winter business, log higher operating expenses, say retailers.

“We’ve still got to pay for the same pumps and the same (equipment) as everyone else, but I don’t have as many customers to do it by,” said McIntyre.

“Whitehorse, they probably go through a nozzle every five years, and I go through two or three a winter because it’s so cold,” he said.

What concerns the Dawson mayor most is the “c’est la vie” attitude that his citizens have towards gas prices.

“Everyone feels the same way; it seems to be a cynical acceptance: ‘Oh, that’s the way it is,’” said Steins.

“What I’m concerned about is that some retailers, gasoline or otherwise, might be taking advantage of that belief or that attitude,” he said.

“If everybody sat down and dealt together, there could be (a price cartel), but nobody does,” said McIntyre.

Contact Tristin Hopper at

tristinh@yukon-news.com

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