Drivers in Hawkesbury, Vankleek Hill, and Grenville pay a lot less for regular gasoline than in other nearby communities. In Ottawa or Gatineau, it isn’t unusual to hear someone boast that they filled up their vehicle at a “cheap” price while passing through the area.
Over the January 5-6 weekend, prices ranged from 92.5 cents per litre to 94.9 cents per litre for regular in the area. Meanwhile, the price was on an average of four or five cents more per litre in other Prescott-Russell communities. In Lachute, it was $1.04 per litre.
Why the cheap gas in our area? According to an expert, it all comes down to the basics of business.
Dan McTeague started tracking gas prices for his constituents when he was a Member of Parliament from 1993 to 2011. Since leaving politics, he’s become a senior analyst with gasbuddy.com, a gas price-tracking website.
McTeague said in the Hawkesbury-Vankleek Hill area, retailers have greater options about where to purchase wholesale fuel from because of the location halfway between Ottawa and Montréal.
They can source their fuel from terminals in either city, rather than just one place. That flexibility leads to a more competitive retail price.
McTeague also noted that the wholesale terminals in Montréal import gasoline from Europe.
The number of independent suppliers of gasoline in the region are also a factor.
Maxville-based MacEwen Petroleum is the largest independent wholesaler and retailer of gasoline in the area. Other independent brands such as Montréal-based Crevier, and Ottawa-based Econo are also prominent.
McTeague says the strong presence of independent operators also creates more competition, which brings down the price, including at major national brands like Shell and Esso.
The interesting part about MacEwen is that according to the company’s website, it supplies fuel to many Esso stations in the region as well.
In Grenville, gas prices are usually the same as they are in Hawkesbury.
McTeague explained that the Québec government has made exemptions for station operators within a close distance of the Ontario boundary that allows them to charge less tax on fuel in order to remain competitive with the lower fuel taxes in Ontario.
Ontario’s provincial gas tax is 14.7 cents per litre. In Québec, it is 19.2 cents. Ontario also adds 13 per cent HST to fuel prices and Québec adds its 15 per cent provincial sales tax.
Within five kilometres of the provincial boundary, Québec gas stations can reduce the provincial fuel tax by up to eight cents per litre.
Lachute, where gas is always more expensive, is outside the limit.
Along with the provincial taxes, there is also a cent per-litre federal tax.
Once the taxes are added on, station owners and operators have very little influence on the price.
McTeague said the markup is only about two to three percent and goes toward the cost of operating the business.
“You can’t run a gas station on nothing, you have to sell a lot of beef jerky to make that up,” he said.
Marc Wilson, who owns the Ultramar station on John Street in Hawkesbury, said the company generally tells him what the price will be, and it usually matches what local competitors are charging.
Wilson’s station is one of the few full-serve stations still operating in the region.
He noted that Hawkesbury’s prices are usually 10 cents per litre lower than Lachute and 15 cents lower than in Montréal.