Thursday, July 17, 2008

What goes up...
Must come down...
I know...
This increase surprised me a little too...
I just didn't know anything about retailers looking for the added 1.25 cents on their margins, not that they didn't deserve it now mind you. What makes me sick about it is that the 'majors' will get it too, as far as I know.
All in all, my numbers in the end allowed for an added 7/10ths of a cent a litre (with my margin of error of 3/10ths of a cent) on gasoline and I also had 2.9 down on heating and stove oils. It was that extra 1.25 added that put the screws to my numbers this time.
Here's what I wanted to let you all in on though...
I've been getting a lot of emails on why our prices haven't come down the same as other jurisdictions and I do have an answer for everyone on that...
Hold off as much as you can until next Thursday, the 24th...
Here's why...
Our regulatory system uses what I like to call a "passive" system of regulation; that is, it waits for events to happen in the markets for a two week period and then reacts to what has occurred during that two weeks of business. Prices that were set this morning were set based on the timeframe of July 2nd and July 15th, from a Wednesday to a Tuesday.
Tuesday was when we saw oil first take it's precipitous dip down, if you remember...
The problem here was exactly that; that prices didn't dip for oil until that last day of the regulatory period. Call it bad luck, but other markets including the immediate Toronto markets, saw prices for gasoline hit $1.40 for the same timeframe which is not unusual for what we saw in crude oil prices.
Our prices never moved during the same time...
Here's where we might see something happen the other way however...
The fall in crude oil prices continues, so much so, that my numbres are already showing the likelihood of a interruption scenario taking shape, only this time DOWN in price. With only the first day of the regulatory period on record, already I'm showing dowjn on gasoline by near eight cents a litre and heating/stove oils down by nearly the same.
I'll be cautious on this one though...
Anything can happen in the markets that might see a complete and utter reversal of what Tuesday saw in the markets and the whole interrupt scenario might be thrown to the wind. I'm holding back on my purchases in the meantime in the hopes that we might see something in the offing next week.
You might want to do the same...
Reagrds,
George Murphy

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