Posted on: Tuesday, June 24th, 2014

21 December 2010

Retail gasoline prices in Canada were more stable in 2010 than they have been in any year over the past decade, according to data collected by London based consultancy Kent Group Ltd. A weekly survey of retail fuel prices across Canada showed that the national average price of regular gasoline reached a high of 110.7 (CDN cents/litre) in early December after posting a low of 98.3 in February. That range of 12.4 cents was in sharp contrast to the average annual price variance of 28.3 cents over the last decade and 40.7 cents over the last 5 years. Diesel fuel has seen comparable stability with a high price of 110.5 in December and a low of 95.8 in February.

This stability was attributed to the steadiness of crude and wholesale gasoline prices over that time. “While the last 5 years have seen wild swings in the price of crude oil, 2010 saw that price (a significant component cost in retail fuel) trade within a relatively narrow range”, says Jason Parent, a Senior Associate with Kent Group Ltd. Prices of the benchmark crude WTI (West Texas Intermediate) have steadily appreciated throughout 2010 from a low of US $68.48 /barrel in May to a high of $89.66 in December, and for at least half of 2010, traded at or above $80/barrel.

Wholesale prices have displayed similar stability in 2010. This was largely a product of relatively stable crude prices and refinery utilization rates (refining capacity/refinery throughput) that, despite increases in 2010, remain below the rates seen over the last 5 years.

Tax increases in various regions of Canada lead to an increase in the tax portion of retail fuel prices. Taxes (Federal, Provincial and Regional) accounted for 31.4% of the national average retail price in early 2010 which had increased to 34.7% later in the year, following the introduction of HST in Ontario.

2010 had also seen a modest recovery in demand after declining throughout much of 2009. Figures available from Kent Marketing Services Limited (a division of The Kent Group) show an increase in demand for Canada in 2010. Year over year data for the first 3 quarters of 2010 showed an increase of 1.3% for both motor gasoline and diesel in the 305 markets (6790 stations) reported by Kent. This represents a 1.1% increase in motor gasoline consumption and a 3.9% increase in diesel.

US figures reported by the Energy Information Administration have shown a similar demand increase. US petroleum demand growth (year over year) turned positive in February of 2010 after being largely negative throughout 2009 and has increased steadily throughout the year; a signal of stronger economic activity. This represents total demand growth of roughly 3% from February 2010 to September 2010.

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