We are often told that higher gas prices in the Tri-Port region are the result of transportation costs to our supposed remote locations. It is, we are reminded, the primary reason for the higher pump prices North Islanders must pay. In other words, if it weren’t for the shipping costs, we would be paying the same for a litre of gas as they do in Campbell River.
I’ve had difficulty accepting this oil company justification and while a slight differential might be expected, a difference of 13 to 14 cents a litre seems to be unreasonable. But what do the actual numbers say? Is the transportation excuse based in fact or fiction?
To find out, I went to the American Transportation Research Institute (ATRI) to determine the average hourly and per mile cost for operating commercial transport vehicles capable of hauling fuel to local gas stations. From there, I had a look at gas prices in Campbell River, Port McNeill and Port Hardy as of May 14, 2018. And finally, I estimated what a typical load would be and calculated the return distances involved for shipping and delivering that load of fuel from Campbell River to our area.
Rounding up that pesky 9/10s of a cent on posted prices, a litre of regular gas in Campbell River cost $1.53 today. In Port McNeill, that same litre came in a $1.66 and in Port Hardy, you were paying $1.68, a difference of between 13 to 15 cents a litre.
A standard fuel tanker, used for highway deliveries to gas stations, holds between 40,000 and 45,000 litres and tandems (used in our area) are double that, so an average capacity of 85,000 litres of fuel is available to trucks heading north.
According to ATRI statistics, https://www.ttnews.com/articles/cost-operating-truck-6-169-mile-atri-report-says the cost to transport that fuel, adjusted for inflation, works out to $1.75 per mile ($1.09 per km) or $73.50 per hour.
Given our distance from Campbell River, a return trip to Port Hardy would take about 6 hours. Toss in another 3 hours to account for stops at each gas station and total time on the road would be about 9 hours.
So, based on those ATRI figures, the cost to transport that gas to local stations, including the deadhead run back to Campbell River, would be $660.00
Given those numbers, that tandem tanker generates an extra $11,900.00 in supposed delivery surcharges for something that cost them less than $700 to actually deliver. That is $11,200.00 in pure (delivery) profit, a charge for something that cost them a penny a litre and you the user, 13 – 14 cents a litre.
They say it is our fault for living so far away when in fact it would appear they are using that distance as an excuse to mark up delivery costs by 13 times what the cost really is.
Would you support any other merchant in town who charged you 13 times what it cost them? I don’t think you would and maybe it is time to voice our displeasure to those who would and do so every day of the week.